Boohoo claims credit for online market success
BOOHOO co-chief executive Carol Kane said the online fashion retailer’s success and recent IPO had acted as a wake-up call for other high street stores to improve their own online businesses, as it posted a jump in sales yesterday.
Boohoo made its successful debut on Aim in March, with a market value of £560m, just eight years after being founded by Kane and Mahmud Kamani.
Its growth has been built on selling its own-branded clothing to fashion-hungry 16- to 24-year-olds on tight budgets and has benefitted from the boom in shopping online and through smartphones.
“What Boohoo has actually done for the retail sector is – not only since the IPO, but in previous years – probably the high street getting better on their e-commerce platforms,” Kane told CityAM
“We have certainly been instrumental in waking up the market,” she added.
Reporting its first half-year results since listing, Boohoo said pre-tax profits were up 23 per cent to £4.5m while revenue jumped 31 per cent to £67m in the six months to 30 September.
The number of active customers on its website grew by 33 per cent to 2.7m, Boohoo said, crediting its mobile website and new Spanish, German and Italian websites with spurring growth.
“A lot has happened since the IPO. We started on our international journey… and we have just recently implemented our new warehouse management system as well, which has been a great success,” Kane said.
Shares rose 3.44 per cent yesterday to 44.48p, but still below its initial offer price of 50p, as Asos’ recent profit warnings and the subdued consumer environment continued to weigh on shares.
Investec analyst Kate Calvert, who reiterated “buy”, added: “Valuation doesn’t reflect the opportunity ahead. Boohoo has invested to put in place the blocks for growth in coming years.”