Positive news for retailers is few and far between of late with even online operations hit by the economic uncertainty brought about by the Covid-19 pandemic lockdown. But British online star Boohoo has bucked the trend with a positive statement that fans of fast fashion have dusted down their debit cards do start shopping again this month.
The company said that after a “marked decrease” in its March sales, performance has improved to such an extent that it expects April’s figures to represent year-on-year growth compared to the same month in 2019.
Boohoo co-founder Carole Kane did, however, remark on a change in buying trends. While ordinarily the company would be taking orders for garments intended for the summer holiday and festival season at this time of year, buyers are now opting for hoodies, t-shirts and comfortable ‘around the house’ items. “People have not lost their fashion credentials but they want comfier clothes,” she said.
The retailer has, like most listed retailers, withdrawn its guidance for the rest of the financial year, with the uncertainty introduced by the coronavirus pandemic making it impossible to make any worthwhile forecasts. But the company has told investors it is in a strong enough position to survive an extended downturn in the worst case scenario.
The company reported a 44% rise in sales over the year ending in February, amounting to revenues of £1.23 billion. Pre-tax profits for the financial year soared 54% to £92.2 million. Founded in 2006 by Ms Kane and Mahmud Kamani, Boohoo has 14 million active customers. The pair previously worked together supplying traditional retailers including New Look and Primark before launching the online retail brand.
Over recent years, Boohoo has been on the acquisitions trail, buying up weaker rivals and struggling bricks and mortar brands including Nasty Gal, Miss Pap, Coast and Karen Millen. It also developed the Pretty Little Thing brand inhouse. The company has recently been linked with moves for Oasis and Warehouse, which last week went into administration.
Ms Kane did not move to quash those rumours, saying Boohoo’s “strong balance sheet means we could successfully acquire more businesses”.
Even if Boohoo does experience a downturn in sales, it should still fare better than high street rivals who lack a strong online presence and who are currently unable to trade as a result of the lockdown.
Boohoo says that it has not been forced to cancel any existing orders with suppliers and its short lead times on stock meant it is not stuck in a position where it needs to make significant clearances. Where necessary, suppliers are being asked to cut materials originally intended for things like dresses into other garments now selling, like hoodies and comfortable home wear.
Chief executive John Lytlle commented:
“Our business is founded on our ability to be agile and flexible and it is at times like this when these abilities are tested, and I am proud of how our colleagues and business partners from around the world have responded to the challenges posed by this pandemic.”