Boohoo’s share price surges as it picks up a two-thirds stake in PrettyLittleThing for £3.3m
No tears over here: Boohoo's just acquired a majority stake in fellow online retailer PrettyLittleThing for £3.3m.
Boohoo's chairman Peter Williams said PrettyLittleThing was a "natural fit" and would complement Boohoo's "inclusive and innovative" brand.
We are delighted to add this fast growing, international business to the group. We believe this is an excellent opportunity to extend the group's overall customer appeal through two distinct, complementary brands while further enhancing the group's strong growth trajectory.
Boohoo has lined up £3.3m for 66 per cent of PrettyLittleThing, with the remaining stake being used to "incentivise" chief executive Umar Kamani and the management team.
Boohoo will have the option to acquire the remaining 34 per cent at market value in 2022.
The retailer's shares rose six per cent in early trading on the back of the news to 125.50p.
Read more: Boohoo upgrades forecast for the second time this year
PrettyLittleThing was set up in 2012 by Umar Kamani, the son of Boohoo founder Mahmud Kamani.
He said as part of the group: "We will continue to build on our strong brand positioning and we are excited by the prospect of continuing to anticipate and set trends."
Revenues at PrettyLittleThing grew by over 400 per cent to £17m last year as the firm delivered revenue of £19m in the six months to 31 August 2016.
Boohoo also said it expects to deliver revenue growth of 38-42 per cent for the full year, up from previous guidance of 30-35 per cent and its earnings margin is expected to rise 11-12 per cent. Black Friday trading was strong, while it added that peak season trading "continues to be encouraging".
Read more: Here's why Boohoo's share price has hit an all-time high
Kamani floated Boohoo.com in March 2014 when stock rose 50 per cent on its first day of trading, giving the firm a value of around £850m.