Boohoo said Debenhams was now the leading British online department store, while Karen Millen had significant potential for further growth overseas.
Stephen Morana, Boohoo’s chief financial officer, said it would consider whether breaking up the brands would deliver better value for shareholders.
He added: “It’s about growing those individual businesses, doing a better job of explaining what we’ve got and then seeing how we maximise the value of them.”
Mahmud Kamani, co-founder and executive chairman of Boohoo, said: “The business has evolved over the last few years and has an offer that is much wider than our original focus on young fashion.
“The time is now right to consider options with regard to corporate structure.”
Boohoo’s share price has plunged in recent years after spiking during the pandemic when consumers were stuck at home with more disposable income. It is now worth just £375m, compared to its peak of more than £5bn.
Shares in Boohoo fell almost 12pc on Friday following the announcement.
Mike Ashley’s Frasers Group has been steadily growing a stake in Boohoo over the past 16 months to become its biggest shareholder with a 26pc holding.
Mr Morana said Boohoo had been engaging with all shareholders over its strategic review.
Boohoo said it has signed a new £222m debt facility with existing lenders to boost funding as it carries out the review.
In an update to investors on Friday, Boohoo said sales fell 15pc to £620m in the six months to September, compared with a year earlier, while adjusted earnings fell to £21m from £31m.
Boohoo said its “youth brands” were struggling amid fierce competition from rivals, but added Debenhams was performing more strongly.
It follows mounting pressure from rival Shein, which has been winning shoppers away with its low prices. Shein recently suggested it had leapfrogged Boohoo in terms of UK sales.
The Chinese fast fashion giant said its revenues hit £1.55bn in 2023, whereas Boohoo’s latest full year results showed revenues of £922m.
At the time, Kate Calvert, an analyst at Investec, said: “Growth in Shein has definitely caused issues for, and sucked sales away, from online retailers such as Boohoo and Asos.”
Mr Kamani said: “The board is focused on ensuring it takes the right steps to drive Boohoo group in the interest of all its stakeholders.”