Popular online retailer Boohoo will rebrand to Debenhams, the department store it bought out of administration four years ago. This follows a tricky sales climate thanks to competition from brands like Shein.
Its young fashion labels sank more than a fifth amid the stiff competition. Dan Finley, the newly-appointed chief executive of the online fashion company, said sales for its founding brand Boohoo, as well as MAN and Pretty Little Thing, slid by 21% to £947m as “we lost our way”.
The online brand had performed well during the Covid-19 pandemic, while high-street shops had suffered. The new name comes from iconic department store Debenhams, off whom Boohoo acquired the name and website operations from administrators.
The debt-laden department store had 123 locations and 12,000 staff, and collapsed in 2020 after Covid shutdowns hit the high-street. Mike Ashley was the largest shareholder in Debenhams before its collapse and is Boohoo’s largest investor.
The brand’s market value spells its financial trouble plain as day. It is worth around £340m today, down from a peak above £5bn.
In an effort to combat the losses, the company said in a statement: “Our ongoing business review has confirmed that Debenhams, its business model, and its technology is at the epicentre of our group going forward,” Boohoo said.
Speaking on the history of the brand, Finley stated: “Debenhams is back,” continuing “The iconic British heritage brand, bought out of administration, has been successfully turned around. Rebuilt for the future and transformed into Britain’s leading online department store.”
Finley admitted that the company had made mistakes “At the time of greatest competition, when the likes of Shein came into the market, we diverted investment from our proposition and marketing into warehouses and infrastructure,” he said.
Investors appeared to have concerns when shares fell by more than 6% at the open, though they later turned positive.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, spoke to Sky News: “It’s no secret that Boohoo has been struggling, and a name change doesn’t change the fact that sales are falling, down 16% in the brief trading update tucked away at the bottom of today’s release.
“Reviving the group’s youth fashion brands is a key challenge, and it’s not clear that bringing back a legacy brand name will do much to help.”
View news Source: https://www.chroniclelive.co.uk/whats-on/shopping/debenhams-returning-after-major-boohoo-31178637
