Yahoo Finance Boohoo sales surge 40% during lockdown
Online fast fashion retailer Boohoo (BOO.L) has seen sales surge 40% during lockdown, underlining a boom for digital retailers during the pandemic.
Boohoo said on Thursday that sales in the four months to 31 December grew by 40% to £660.8m ($901.98m). The period included second lockdowns across the UK and parts of Europe in November.
“Growth has been strong across our multi-brand platform and we have continued to grow our market share across all geographies,” chief executive John Lyttle said in a statement.
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Revenue was up 42% in the ten months to the end of December and Boohoo raised its forecast for full-year revenue growth. The company’s financial year ends in February.
“The group is in an excellent position entering 2021, which we expect to be another year of progress towards our goal of leading the fashion e-commerce market globally,” Lyttle said.
The bullish update came a day after rival ASOS (ASC.L) said lockdown was likely to add £40m to its annual profits. Sales at ASOS rose 24% in the four months to the end of December.
With business booming, Boohoo — which also owns brands like Oasis and Warehouse — said it was close to sealing a deal for more warehouse space to store its goods. The company said a new warehouse was set to open in April and would support the creation of 1,000 jobs.
READ MORE: ASOS predicts £40m profit boost from lockdown
Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown, said: “It’s even better business than usual at Boohoo, with the group reporting an impressive 40% increase in revenue.
“As we shop online more than ever before, Boohoo has emerged as a favourite spot to snap up lockdown attire. Boohoo’s nimble supply chain allowed it to pivot its offering quickly when tastes changed in favour of loungewear and pjs, which offered a serious boon.”
Last year, Boohoo was caught up in a scandal over the treatment of workers in its supply chain, who were allegedly paid below minimum wage and worked in poor conditions. A report by Alison Levitt QC identified “many failings.”
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Boohoo hired Sir Brian Leveson in November to help overhaul the organisation in response to the report. Leveson published an interim report on his progress on Thursday.
The report outlined progress made by the company, such as hiring KPMG and oversee the reform process, appointing a new non-executive director to bring oversight, and ditching 64 suppliers who were identified as substandard. Leveson said it was “early days” but said Boohoo had “proceeded with pace.”
Leveson urged leadership from the top on the programme to ensure it did not become an empty corporate exercise.
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“It is important to set a shared clear vision of the future, reinforcing the ethics and compliance agenda through corporate change and to announce what Boohoo will look like after implementation of Agenda for Change,” he wrote in his report.
“This must be clearly articulated by the Board and cascaded from the top of the Group to the most junior staff. Failure to do so will pose a risk to the progress and ultimate success of the Programme.”
Lund-Yates said: “Implementing the amount of change needed isn’t straightforward, and there is plenty of work to be done. But [Sir Brian] acknowledged that Boohoo was now on the right road.”
Boohoo shares were down half a percent in early trade in London.
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