Fast fashion: Boohoo bucks high street gloom with soaring revenue
Fast fashion retailer Boohoo has again defied a gloomy retail sector, reporting 39 per cent sales growth in the last quarter.
The firm’s offering, of selling cheap own-brand clothing and accessories online, has chimed with younger consumers in recent years. Boohoo’s rise comes at the same time as high street rivals such as Topshop fight for survival amid declining footfall.
Read more: Here’s why Boohoo shares are climbing higher
The figures
Boohoo’s global revenue rose 39 per cent in the three months to 31 May, reaching £254.3m. Revenue growth in Britain rose 27 per cent, while abroad it soared 57 per cent.
The firm had a net cash position of £194m, up on last year’s figure of £151m, while gross margin was flat at 55 per cent.
The group kept its guidance for the full year – or 25 per cent to 30 per cent revenue growth, with a core profit margin of about 10 per cent.
Despite this, shares fell 2.5 per cent in early morning trading, on the back of last week’s claims by union Usdaw that the firm has been “found wanting” on union representation.
Why it’s interesting
Boohoo’s meteoric rise underlines the popularity of online shopping, while high street retail companies such as Philip Green’s Arcadia, which owns Topshop, face restructuring just to survive.
But the fast fashion retailer has had its fair share of controversy, with the Union of Shop, Distributive and Allied Workers (Usdaw) claiming Boohoo has not done enough to give its workers an independent voice last week.
Meanwhile, MPs have also criticised the firm in their inquiry into the sustainability of the fashion industry, saying “throwaway fast fashion is having a huge environmental impact” last month.
Boohoo also owns fashion retail brands Pretty Little Thing and Nasty Gal.
Brewin Dolphin investment manager John Moore said: “Boohoo is a timely reminder that, with the right approach, there is still a place for a carefully-considered and marketed retail offering that knows its customers and how to provide products they want.”
What Boohoo said
Chief executive John Lyttle said: “The group has made a strong start to the year as we continue to disrupt and capture market share in the UK and internationally across all our brands.
Read more: Boohoo profit piles up again
“Our multi-brand strategy is really capturing our customers’ attention.
“We have ambitious plans for the group, and continue to invest to ensure that our scalable multi-brand platform is well-positioned to disrupt, gain market share and capitalise on the global opportunity in front of us.”