IHe talks about the hardships of last year that Boohoo has a tab on his website called “plans” where shoppers can filter their vampire outfits based on their suitability for a “picnic”, a “beer garden” or better yet. , “June 21”, A day of red letters in which the country is expected to say: “See you, closure”.
With social life on hold for more than 12 months, there has been little demand for prom dresses sold under its Boohoo and PrettyLittleThing (PLT) labels, sometimes for as little as five dollars. But that hasn’t stopped the sales advance at the Manchester-based group, as it quickly switched to selling joggers and hoodies patterned with slogans such as “vacation home,” to laze around at home.
On Wednesday, its chief executive, John Lyttle, is expected to report a nearly 40% increase in annual sales to £ 1.7bn, after the web-only group became one of the beneficiaries of the enormous growth. in online shopping seen in the past. year. Earnings are expected to rise by more than a third to £ 147 million in the year through the end of February. Today’s commerce will also have been fueled by the resurgence in demand for clothing to go out as the nation enjoys new freedoms.
But while buyers remain enthusiastic buyers of Boohoo’s cheap clothing, investors are more cautious about his actions after revelations last summer linked him to factories with poor working conditions here and abroad.
The share price, which hit 415 pence in June 2020, nearly halved after the scandal, and Aberdeen Standard Investments, one of its largest shareholders, dumped most of its stake and lamented the inadequate Boohoo’s answer.
Fast forward nine months and the company is jumping through the hoop to show the world that it has changed. Retired judge Sir Brian Leveson is overseeing a review of his supply chain and the work done so far has included severing ties with hundreds of companies and banning outsourcing by their top suppliers.
Mahmud Kamani, Chairman of Boohoo, also recently told MPs on the environmental audit committee, who have been highly critical of the company, that the board was considering linking management bonuses to progress made on upgrading its environmental credentials, social and governance.
The way Boohoo behaves is more important than ever now that it has surpassed the big street names struggling, including, more recently, the Debenhams brands; With a market value of £ 4.2 billion, Boohoo is already worth £ 1 billion more than Marks & Spencer. Lyttle is expected to explain the company’s plans for the Debenhams website, which it has quietly relaunched, having promised to make it the UK’s largest online marketplace for fashion, beauty, sports and household goods. .
Boohoo also acquired Dorothy Perkins, Wallis and Burton from the Arcadia remains of Sir Philip Green. A recent agreement reached for a new warehouse in Daventry, Northamptonshire, indicates the scale of its ambitions. The site will eventually give the group the firepower to handle annual sales of £ 4bn, more than double the current level.
Today its shares are back at 337 pence, but despite the positive financial performance, many investors are reluctant to get involved until they are sure there are no skeletons left in the closet. So while Boohoo, like other fashion chains, will benefit from the return of socialization and the resurgence in demand for party dresses, shirts and jeans, it has more to do than simply make the right decisions about this trend. season.
Analysts at investment bank Berenberg predict that Boohoo will benefit from the easing of lockdown measures – its biggest brands, Boohoo and PLT, have historically enjoyed strong clobber sales to get out of. However, their actions in social and environmental matters will be key to the performance of the actions, they affirm. “While we are coming from a low base, on balance from what we’ve seen so far, we are encouraged by the progress Boohoo is making.”
George is Digismak’s reported cum editor with 13 years of experience in Journalism