British online fashion retailer Boohoo (BOOH.L) said on Tuesday that it is rebranding itself as Debenhams Group and also named Phil Ellis as its new finance boss.
Last October, Boohoo announced the departure of then-CEO John Lyttle, appointing Dan Finley to replace him as it launched a strategic review.
Boohoo said the ongoing review had confirmed that Debenhams is at the epicentre going forward, adding that it sees a clear path to Debenhams becoming in the medium term a business with a multi-billion pound gross merchandise value and a core earnings margin on net sales of about 20%.
Shares of the retailer dropped 6% before recovering to stand 1% higher on the day by 0830 GMT.
"The Debenhams marketplace is the growth driver, the biggest contributor to group profits and the engine behind the strategy to turn the fashion brands around," Wayne Brown at Panmure Liberum said.
However, RBC Capital Markets analysts warned that prolonged issues may require greater investment to regain customers, risking further disappointment in sales and profitability, especially outside the UK.
Boohoo's total value of goods sold before deducting customer returns or refunds for the year to February 2025 was down 10% and it said it expected to report adjusted core earnings for 2025 of around 40 million pounds ($51.7 million).
Once boosted by the pandemic's online shopping surge, the company is now grappling with supply chain issues, rising returns, weak consumer demand and tough competition from Shein and Temu.
In recent months it has closed its U.S. distribution centre, raised equity, sold its London office and cut 50 million pounds in annual headcount costs, and is continuously reviewing expenses.
In January, Boohoo shareholders rejected an attempt by largest shareholder Mike Ashley's Frasers Group (FRAS.L) to remove co-founder Mahmud Kamani from the board.
Ashley and Kamani have been rivals in the past, notably when Frasers failed to rescue department store chain Debenhams, in which Ashley previously held a stake.
Boohoo acquired the name and website operations of department store chain Debenhams from its administrators in 2021.
On Tuesday, Boohoo said that Debenhams is growing rapidly and that it is very profitable and highly cash generative.
Phil Ellis, the current finance director of Debenhams, will become group CFO, replacing Stephen Morana with immediate effect.
($1 = 0.7733 pounds)
