The UK’s high street may be struggling but online fashion retailer Boohoo has demonstrated that its more than bucking the trend after it reported 39% sales growth over the first quarter. The fast fashion group whose brands include PrettyLittleThing, Nasty Gal and MissPap sells own brand garments, accessories and cosmetics to a core audience of 16-30 year-olds.
The wider retail and fashion industry is going in the opposite direction with the Arcadia empire of Topshop, Miss Selfridge and Dorothy Perkins on the verge of collapse and House of Fraser, M&S and Debenhams also recently forced into reducing their number of bricks and mortar stores. But Boohoo’s strategy of cheap, mobile-friendly fashion shopping targeting the social media crowd and trends is paying dividends. The company is growing while many of its competitors stare at the abyss.
Today’s Q1 results were the first to be delivered by new chief executive John Lyttle who joined the company in March from his previous role as COO of Primark – another retailer that has had great success with the ‘stack ‘em high, sell ‘em cheap’ approach to the fashion industry.
Boohoo’s 39% sales growth took revenues to £254.3 million. Broken down geographically, UK operations showed 27% growth over the quarter year-on-year and the international unit 56%. Boohoo, the company’s core brand saw revenue increase by 27% to £123.5 million. Pretty Little Things and Nasty Gal did even better, up 42% to £112.1 million and 153% to £18.2 million in revenue respectively.
The Boohoo share price has benefitted to the tune of 1.7% in trading on the AIM exchange so far today. Overall market capitalisation is a little over £2.7 billion, around 15% off its peak, achieved two years ago in June 2017.
The company is just 13 years old and was started by co-founders Mahmud Kamani and Carole Kane who first worked together back in 1993 for Pinstripe, a supplier to fashion retailers like Topshop and H&M and itself founded by Kamani’s father. The pair have now stepped upstairs to respective roles as executive chairman and executive director, letting Mr Lyttle take over the day-to-day role of running the company as chief executive.
Analysts were quick to praise Boohoo for beating expectations again, something which has become a habit for the company, despite the currently rocky macro environment for the retail sector. The only real cloud on the horizon is a lawsuit that has been started by IT contractor Richard Womack. Womack claims he was promised a 10% share of Boohoo as its third founder back in 2006 after working on the original website and company’s IT infrastructure.