In a strategic shift, Debenhams Group has announced it will retain ownership of the fast fashion brand PrettyLittleThing, reversing earlier plans for a potential sale. This decision follows a notable improvement in the brand's profitability and recovery trajectory, which has impressed the company's board.
Background and Initial Sale Considerations
Debenhams, which rebranded from Boohoo Group in March 2025, had initially explored the disposal of PrettyLittleThing in August as part of a broader restructuring effort. This move came five years after Boohoo acquired the remaining 34 per cent stake in the brand from Umar Kamani, son of Boohoo's executive chair Mahmud Kamani, and business partner Paul Papworth, in a deal valued at over £260 million.
At the time, the group faced challenges, with year-end figures published in August revealing a 10 per cent decline in turnover. The youth-focused brands, including Boohoo, Boohoo Man, and PrettyLittleThing, were particularly affected, experiencing revenue drops exceeding 20 per cent to £1.5 billion. Any potential sale would have involved significant operational changes, such as the closure of the Burnley distribution facility and the loss of more than 1,200 jobs, as reported by City AM.
Turnaround Success Leads to Retention
However, Debenhams has now abandoned the sale plans after being particularly pleased with the pace and scale of PrettyLittleThing's recovery. In a recent trading statement, the company noted that the board had previously classified the brand as an asset for sale but has since changed its stance.
The statement elaborated: Given the success we are seeing with the turnaround, the momentum it is building and the substantial opportunity ahead as a fashion-led marketplace, the brand will be retained. This decision underscores the brand's revitalised performance and its strategic importance to Debenhams' future operations.
Financial Performance and Strategic Adjustments
Debenhams also disclosed that its trading performance has exceeded market forecasts, with full-year profit before tax projected to reach £50 million. This surge in earnings is attributed to the sustained success of the Debenhams brand and a discernible improvement in its youth brands, enabling all divisions to remain profitable.
Despite retaining PrettyLittleThing, the firm will continue its strategy to divest non-essential assets. This includes progressing with disposals and exploring licensing opportunities as part of efforts to reduce net debt within the next 12 months. Additionally, the company has accelerated its transformation strategy, aiming to evolve from a former department store chain into a stock-light, capital-light digital marketplace focused on premium beauty and fashion accessories.
Analyst Perspectives
Industry analysts have responded positively to these developments. Panmure Liberum analysts Wayne Brown and Anubhav Molhotra highlighted that the company's earnings momentum is nicely positive and noted that PrettyLittleThing is now positioned to be a centre piece of the fashion marketplace model. This endorsement reflects confidence in the brand's role within Debenhams' revamped business approach.
Overall, the retention of PrettyLittleThing marks a significant milestone in Debenhams' ongoing restructuring efforts, showcasing the brand's resilience and potential for growth in the competitive retail landscape.
