Online fashion retailer Boohoo has today reported that its revenue has increased by 41% to £1.7bn over the last year.
The firm is one of the main companies within the sector that has succeeded during the pandemic – as customers switched to using e-commerce platforms.
Boohoo also announced that pre-tax profits grew by 35% to £124.7m over the same time period – up from £92.2m the previous year.
The AIM-listed, Leicester-based business has acquired a number of high street brands since the pandemic hit, including Debenhams, Dorothy Perkins, Wallis and Burton.
Boohoo said it expects these new acquisitions to contribute to a 5% growth in sales over the next 12 months.
Mahmud Kamani and Carol Kane, group co-founders, today said: “Over the last year the group has made great progress, delivering another set of record results despite the challenges posed by the Covid-19 pandemic. We have made significant progress on our Agenda for Change programme, with greater oversight of our supply chain, stronger governance and more transparency.”
Boohoo shows its bang on trend and struts ahead with huge profits
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown shared her view on the announcement with Business Leader.
Boohoo has strutted ahead of flailing high street rivals showing that its bang on trend when it comes to the way fashion followers want to shop and the styles they want to buy.
Its digital platform captured lockdown pounds on a huge scale, pushing up revenues by 41% to £1.745 billion. boohoo was already ahead of the fashion pack when it came to e-commerce and as the shift to online accelerated, boohoo was on the money, with full year pre-tax profits rising by 35% to £124.7 million.
Looser stay at home styles like sports and loungewear added extra comfort as the fit was easier to get right, so people sent fewer items back. With the returns bugbear retreating, that helped push up gross margins to 54.2%.
Superstar sales have meant boohoo has piled up the cash, with its operating cash flow hitting more than £200 million, compared to £127 million in 2020.
Its deeper pockets has already sent boohoo on a spending spree rifling through Arcadia’s bargain bins to grab a clutch of brands including Dorothy Perkins. It’s also grabbed the Debenhams online store, with the aim of turning a company, which began as a market stall, into an international apparel marketplace. This plan is on track with revenue growth for international up 44% over the year, now accounting for a bigger slice of the overall sales pie.
As the retail world adjusts to a new normal, with competitors upping their digital game, and high streets re-opening around the world, this level of performance will be hugely difficult to match. But even so boohoo still expect revenue growth for the full year to be at an impressive around 25%, with 5% of this coming from newly acquired brands.
Boohoo is now a fashion powerhouse, and investment in scaling the platform is expected to keep paying off, with even higher margins expected in the second half of the year. But the catwalk isn’t completely clear, with hurdles of uncertainty ahead.
Customer returns are expected to rise once again, as shoppers opt for more fitted fashions as they venture out once again. The supply chain issues are still hovering with a whiff of scandal, but the company will be hoping its root and branch review of factories, will calm investors’ concerns about its ethical credentials. It will be highly conscious that any flare up of concerns could derail its global expansion plans.