The online fashion seller Debenhams, formerly known as Boohoo, is considering the sale of its Pretty Little Thing (PLT) brand and the closure of its distribution centre in Burnley, which could lead to the loss of 1,251 jobs.
The company said it was “exploring a range of long-term options”, understood to include closure for the Burnley site and the sale of an already closed warehouse in the US amid falling sales and widening losses.
The potential sale of Pretty Little Thing comes five years after Boohoo bought out a minority stake for more than £260m from Umar Kamani, the son of Boohoo’s executive chair and co-founder Mahmud Kamani, and business partner Paul Papworth.
In delayed annual results, Debenhams said pretax losses had widened to £264m in the year to 28 February, from £164m a year earlier. One-off costs, including a writedown on its US warehouse and restructuring costs, amounted to £199m.
Sales fell by 10% to £2.3bn, with the group’s “youth brands” – Boohoo, PLT and BoohooMan – taking the biggest hit, with sales down by more than a fifth to £1.5bn.
The main Boohoo brand has faced difficulties amid the rise of cheap online alternatives such as the Chinese-founded Shein and the secondhand specialist Vinted as well as pressure on the disposable income of its young shoppers.
The group’s Debenhams arm, which includes an online marketplace and the Warehouse, Oasis and Dorothy Perkins brands, increased sales by just over a third to £654m but sales at the fashion brand Karen Millen slid 3%.
Dan Finley, the chief executive, said Debenhams’ board had “recognised the need for change following a long period of sustained and unacceptable underperformance” and was cutting costs and reducing stocks.
“The business has been through a very challenging period which is reflected in these results,” he added. “I want to assure shareholders that the business is taking the necessary actions, quickly and decisively, to address the challenges that we face. No stone will be left unturned.”
The potential job losses at Debenhams come as Poundland confirmed plans to close up to 150 stores and two distribution centres, putting more than 2,000 jobs at risk.
The cut-price retailer won approval from creditors and the high court on Tuesday for the rescue plan, which involves the closure of 68 stores this month, some of which have already shut their doors, and rent cuts on dozens more. In time, it wants to close up to 150 outlets.
The company, which was sold in June for £1 to the US investment group Gordon Brothers, has more than 800 outlets in the UK and the Republic of Ireland, employing about 16,000 people. It is also stopping selling online, ditching its Perks loyalty app and ceasing to sell frozen foods.
That will lead to the closure later this year of Poundland’s frozen and digital distribution centre at Darton, South Yorkshire, and its national distribution centre at Springvale in Bilston, West Midlands, in early 2026. Two other distribution centres, in Wigan and Harlow, will continue to operate.
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It wants landlords to cut rents to zero on up to 180 stores – putting the future of those outlets in doubt – while seeking rent reductions of between 15% and 75% on dozens more stores as part of a restructuring process that it will put to creditors in August.
Barry Williams, Poundland’s managing director, said: “Today’s decision is vitally important for Poundland, allowing us to stabilise the business, securing the future of hundreds of stores and thousands of jobs.
“Despite the opportunity this ruling provides, I’m extremely mindful of its consequences for our colleagues, especially those leaving us as we streamline our store estate, distribution network and support teams.”
He said the business was now focused on “getting us back on track – revamping ranges, lowering prices and creating the simpler and more focused Poundland we know our customers are eager for us to deliver”.
Williams said Poundland was reducing its chilled food ranges to essentials such as milk and butter but expanding its clothing, especially for women, and bringing back seasonal favourites.