Sunday, May 20News That Matters

Fast-fashion chain Boohoo almost doubles sales in 2018


Online fast-fashion retailer Boohoo.com has unveiled booming full-year sales and profits as customers flocked to its £20 party dresses and keenly-priced jeans.

The Jersey-domiciled group reported pre-tax profit of £43.3m for the year to February, which met analysts’ forecasts and represented a 40 per cent increase on the previous year. Revenue was £580m, almost double last year’s £295m.

That growth partly reflects the acquisition in 2017 of PrettyLittleThing, a company started by co-founder Mahmud Kamani’s son, and US-based Nasty Gal.

Boohoo said it now has 6.4m active customers, a 22 per cent increase on a year ago. PrettyLittleThing is now serving 3m customers, representing 128 per cent growth.

The group also said trading in the first few weeks of its new financial year had been “strong”. Mr Kamani and joint chief executive Carol Kane now expect 35 to 40 per cent sales growth for the year ahead, with an adjusted profit margin of 9 per cent to 10 per cent.

The joint CEOs said on Wednesday:

Against a backdrop of difficult trading in the UK clothing sector, the group continued to perform well, gaining market share in the expanding online sector.

To facilitate its sales growth, the company plans to construct a new UK warehouse at a cost of £150m. It raised £50m of fresh equity in a placing last year to help fund the project, and PrettyLittleThing is also moving into its own warehouse. Boohoo said this new capacity will help it develop a distribution network capable of generating £3bn of annual net sales globally.

However, investors in other online retailers such as Asos and German rival Zalando have started to grow cautious about the heavy capital spending required to sustain heady rates of sales growth.

Boohoo shares, which trade on the more lightly-regulated Alternative Investment Market, are down almost two-fifths since its half-year results in September 2017. Mr Kamani and Ms Kane have both sold stock over the past year.

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