Boohoo revenue up 41% to £1.7bn, but growth to slow

Manchester online fashion giant Boohoo said on Wednesday its revenue soared 41% to £1.745 billion and profit before tax rose 35% to 124.7 million in the year to February 28, 2021, amid a surge in online shopping during the pandemic.

However Boohoo said it expects group sales to rise 25% in the year to February 2022, less than the 29% forecast by analysts.

Boohoo has survived negative publicity over failings in its supply chain.

Last September, the firm accepted all the recommendations of an independent review that found major problems after newspaper allegations about low pay and working conditions in factories in the Leicester area.

Boohoo CEO John Lyttle said: “FY21 has been a year of significant investment for the group as we build a platform for the future and I am very pleased to report a strong financial performance.

“Our established businesses have continued to grow across all territories as we gain market share with our compelling consumer proposition.

“We completed over £250 million of acquisitions in the period, which included Oasis, Warehouse, Debenhams, Dorothy Perkins, Burton and Wallis, as well as the purchase of the remaining minority interest in PrettyLittleThing in a transaction that to date has resulted in substantial earnings enhancement for the group’s shareholders.

“Our newly-acquired brands are being re-energised and made relevant for today’s consumer across a broader market demographic.

“We are very excited about their potential and are already seeing the early rewards from their growth.

“We have also invested in improving the oversight and transparency of our supply chain and we are committed to embedding positive change through our ambitious UP.FRONT sustainability strategy.

“As we build for the future, we continue to invest across our platform, people and technology to further cement our position as a leader in global fashion e-commerce.”

AJ Bell financial analyst Danni Hewson said: “Lockdown has boosted Boohoo’s sales by 44%; disruption to air freight has impacted global growth and governance with a capital G is front and center as the group look to put supply chain issues firmly in its rear-view mirror.

“Boohoo is at pains to point out the number of new hires responsible for maintaining high ethical and sustainability standards.

“Its commitment to transparency includes publishing a list of its international manufacturers in September and a decision to cut loose a number of UK suppliers which didn’t mesh with the group’s values.

“What investors are waiting for is the commitment from bosses to link these targets with financial reward.

“Boohoo has confirmed that discussions have been had and further details will be shared in the annual report due out later this month.

“This is the crucial part of the jigsaw, a tangible link between social responsibility and fiscal reward.

“The businesses existing customers might not have been put off by the businesses supply chain failings, but Boohoo is diversifying.

“Its integration of brands like Debenhams will require it to attract a new shopper.

“Price is undeniably important but as retail reopens and competition intensifies the story behind the brand will become ever more important.

“Splashing out should make customers feel good about their purchases; giving them one more reason to feel the glow has to be excellent for business.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.