Going out’ gear out and athleisure in for Boohoo
Boohoo has reported a 41% rise in full-year sales as home working fuelled demand for athleisure, making up for a slump in “going out” gear.
The online retailer said customers bought more activewear and loungewear during the pandemic.
But it saw “significant declines” in areas such as dresses and “going out” clothes due to Covid lockdowns.
Over the year, Boohoo bought a number of High Street brands which foundered in the pandemic, including Debenhams.
It also acquired Dorothy Perkins, Wallis and Burton from Sir Philip Green’s Arcadia Group. Manchester-based Boohoo said it expects these new acquisitions to contribute about 5% to sales growth in the current financial year.
The Boohoo group benefitted from the switch to online shopping as Covid restrictions left many non-essential retailers shut for long periods. In the 12 months to 28 February, total sales rose to £1.7bn up from £1.2bn for the comparable period in the previous year.
Pre-tax profit grew by 35% to £124.7m.
During the year, Boohoo was also hit by claims that one of its suppliers was paying staff below the minimum wage. The Sunday Times also reported unsafe working conditions at the Leicester-based business which supplied Boohoo’s Nasty Gal brand.
As a result, Boohoo launched an investigation into its supply chain and set up an “agenda for change” programme to develop “meaningful changes to the way we do business”.
In its full-year results, Boohoo’s chief executive John Lyttle said that he was “proud to lead a business that, instead of choosing to walk away from the allegations, took the immediate decision to do everything within its power to address them”.
However, the company faced significant backlash over the allegations from both City shareholders such as Standard Life Aberdeen as well as other retailers, including Next and Asos, which said they would stop selling Boohoo’s clothes.
Boohoo said it had completed £250m worth of acquisitions over the past year to February, which also included Oasis and Warehouse.
The company, which also owns Coast and Karen Millen, said that it had successfully integrated and re-launched both these brands across its platforms.