British online fashion retailer Boohoo bucks subdued industry trend
Group's share price up 42% so far this year as it posts stellar sales for its first quarter
London — British online fashion group Boohoo bucked a tough retail market with robust sales growth in its latest quarter as its offer of cheap clothing, delivered quickly, chimed with shoppers.
Boohoo, which sells own-brand clothing, shoes, accessories and beauty products, said on Wednesday that revenue rose 39% to £254.3m in its first quarter, the three months to May 31. The group achieved strong revenue growth across all geographies, with UK sales up 27% and international up 56%. Its gross margin was 55%.
Founded just 14 years ago in Manchester, Boohoo grew fast, listing in 2014 and buying the PrettyLittleThing and Nasty Gal brands in 2017. The group is tapping into a generation of younger consumers who shop on mobile phones and share fashion tips through social media.
The group kept its guidance for the full 2019-20 year, revenue growth of 25% to 30%, with a core (adjusted ebitda) profit margin of about 10%.
Boohoo's share price, up 42% so far this year, was 230.1p at close of trade on Tuesday, valuing the business at £2.67bn.
While Boohoo thrives, the wider sector is struggling. Last week, an industry survey report said British shoppers cut back spending in May by the most in more than 20 years, raising questions about how long consumers can keep on cushioning the economy from Brexit.
On Tuesday, fashion retailer Ted Baker's share price fell more than 25% after a profit warning.
While Boohoo is growing fast, peer Philip Green’s Topshop-to-Dorothy Perkins Arcadia fashion group is battling to survive.