Following today’s release of the boohoo group figures for the four months ending 31 December 2020;
Emily Salter, Retail Analyst at GlobalData, a leading data and analytics company, comments:
“The boohoo group has continued to report enviable revenue growth in the face of COVID-19, with total sales increasing by £187.1m to reach £660.8m, though this marks a slight deceleration of growth versus that of the 10 months to 31 December (42.3%). The group has raised its guidance for FY2020/21 revenue growth to 36-38%, far exceeding its previous guidance of 28-32%, as further non-essential store closures in the UK clashed with a key part of the golden quarter including Black Friday, enabling the group to benefit from a renewed shift of sales online through its reputation for promotions, trend-led styles and a leading online offer.
The loss of demand for partywear could have significantly dampened its sales during this quarter as this category would usually be an important component of its key brands’ offer, so its impressive sales growth is testament to the group’s agility that has enabled it to successfully pivot to the more resilient categories of athleisure and loungewear instead. However, its newer brands Karen Millen and Coast, traditionally known for their formalwear and occasionwear offers, will have been the worst hit by the lack of festive events and further office closures as a result of new lockdowns, with heavy discounting rife throughout the period.
Key competitor ASOS is hot on the boohoo group’s heels, with a 35.5% increase in UK retail sales for the same period as enhanced digital marketing including style edits with influencers and celebrities, and the launch of its more affordable in-house womenswear brand ‘AsYou’ helped it better compete with boohoo.com and PrettyLittleThing. As with ASOS, the boohoo group is confident in its potential for significant long-term growth in the UK, with a new warehouse opening in April. However, its growth is strongest in the US, which now makes up 54.1% of total revenue as the brands continue to gain traction there.
The boohoo group has come under significant fire in the past year for the conditions in its supply chain, leading to the introduction of its Agenda for Change to implement recommendations of the independent inquiry. The group has made efforts to bolster the credibility of this programme, such as appointing KPMG to monitor it, with actions including removing 64 suppliers from its UK base, opening its own manufacturing facility in Leicester later this year, and publishing its first Annual Sustainability Report at the end of this financial year. Even though some of the group’s actions are still controversial, such as PrettyLittleThing selling clothing items for less than £1 on Black Friday, these changes will help set a standard of greater transparency among fast fashion brands, boosting investor and consumer confidence.”