Boohoo.com

Boohoo Group plc is a UK-based online fashion retailer, aimed at 16–30 year olds. The business was founded in 2006, and had sales in 2019 of £856.9m. It specialises in own brand fashion clothing, with over 36,000 products. The firm's shares lost 46 per cent of their value by mid-July 2020 after Sunday Times allegations about a supplier's failure to protect workers in Leicester.[2]

Boohoo Group plc
Public Limited Company
Traded asLSE: BOO
ISINJE00BG6L7297
IndustryFashion
Founded2006
FoundersMahmud Kamani
Carol Kane
Headquarters
Dale Street, Manchester
,
United Kingdom
Area served
United Kingdom
Key people
ProductsClothing
Revenue £856.9 million (2019) [1]
£47.4 million [1]
Number of employees
2,352 (2019) [1]
SubsidiariesNasty Gal
PrettyLittleThing
Websitehttps://www.boohoo.com/

History

Boohoo was founded in 2006 by Mahmud Kamani and Carol Kane, who respectively serve as group executive chairman and an executive director[3] and previously supplied high street chains such as Primark and New Look.[4]

Boohoo's core products include dresses and tops, with a selection of over 27,000 styles of clothing.[5] Boohoo has been criticised for promoting fast-fashion which critics claim comes at a cost to those making the clothes and the environment.[6] More than half of Boohoo's garments are produced in the UK, especially Leicester, London, and Manchester.[7] Boohoo buys 75%–80% of the clothing produced in Leicester. This was made possible when other retailers such as ASOS reduced the amount they sourced from Leicester over concerns about working conditions.[8] In 2017, Channel 4 documentary Dispatches found that factories in Leicester supplying Boohoo (along with New Look, River Island, and Missguided) were paying workers less than the minimum wage. Boohoo stated that the work had been subcontracted without their knowledge.[7] During the COVID-19 pandemic, Boohoo reported an increase in sales.[9] In late June, workers' rights group Labour Behind the Label produced a report that stated factories supplying Boohoo were not following to social distancing and forcing employees to work even if sick, claims that Boohoo denied.[10] This was followed by an investigative report by The Sunday Times which claimed to have found that workers producing clothes for BooHoo were paid £3.50 an hour, less than half the UK minimum wage for over 25s.[11]

Business operations

According to Chief executive Carol Kane, Boohoo can differentiate itself from its closest rivals, as all their clothing ranges are own-branded with average prices of £17 as of March 2014,[4] comprising 9000 clothing lines. With a primary focus on the 16–24 year old age group, it sells clothing to over 100 countries and as of June 2014 had seven major markets, including the UK, the US, and France. Stock is purchased in small quantities of between 300–500 items at a time, with repeat orders typically of 25% on those that sell well.[12] Customers can order items up to midnight for next-day delivery, including on Sunday.[13] Customer numbers increased by 29% throughout 2016-17, up to 5.8 million.[14]

As an online retailer, Boohoo utilise social media as an integral part of their marketing strategy. A social media manager was appointed in 2012, with all employees encouraged to assist the social media team by contributing messages and imagery.[15] As of June 2019, boohoo had 6m Instagram followers, 1.1m Twitter followers and 2.9m likes on facebook.[14]

Corporate affairs

Boohoo also owns boohooMAN, PrettyLittleThing, Nasty Gal and MissPap, all targeted at 16–24 year olds.[16] PrettyLittleThing was acquired in December 2016, with the retailer purchasing a 66% stake in the business at a cost of £3.3m, with the existing management team retaining the remaining shares.[17]

During the year up to April 2017, customer browsing from mobile devices accounted for 70% of total sessions, an increase of 4% from the previous year, with downloads of its mobile app across the United Kingdom, United States and Australia totalling around 2.2 million.[13]

Financial performance

In the 10 months to December 2013, Boohoo had sales totalling £92m, with a profit before charges of £10m.[4] By February 2014, total sales had reached £110m, with profits of £11m.[12]

Turnover in the year to February 2015 was £139.9m, an increase of 27% from the previous year, with an increase of gross profit by 31% to £85m.[15]

In April 2017, Boohoo announced that its profits had almost doubled to £31 million on sales up 51% to almost £300 million.[18] When the company was floated on the stock market in 2014, it was valued at £560m, and is worth about £2 billion as of April 2017.[18] Internationally, the retailer suggests its 140% growth to revenue of almost £40m has exceeded expectation, whilst growth in Europe was 44% and 42% for the rest of their international operations.[13]

Strong performance was reported in April 2018, when Boohoo announced almost double revenue from the previous year, up to £580 million, a pre-tax profit of £43.3 million and a 22 percent increase in customers.[19] Boohoo has continued to experience strong performance with the last four-month period for 2019 experiencing a 44% jump in revenue to £328.2m.[20]

During the 2020 COVID-19 pandemic Boohoo was reported to have turned a greater profit than in the previous fiscal year.[21] Euronews Living reported at the time that "Boohoo has managed to capitalise on cosy clothing when its customers need comfort above all else."[21]

In June 2020, Boohoo announced that it was to acquire the brand and websites of high street chains Oasis and Warehouse for £5.25m, as it revealed a 45% increase in first quarter revenue.[22]

Criticism

In July 2020 Boohoo was accused of sourcing their garments from Leicester's manufacturers who pay less than the minimum wage[23]. Labour Behind the Label also accused Boohoo of sourcing garments from factories that did not protect staff from Covid-19 as well as general poor working conditions at their UK suppliers[24]. Meanwhile, Standard Life Aberdeen, the big asset manager and a top 10 shareholder in the group, announced that it had sold most of its stake in the company a few days after the Sunday Times revelations. SLA said that after engaging with Boohoo's management team a number of times during the week, it found the online retailer's response to the allegations was "inadequate in scope, timeliness and gravity".[25] On 15 July 2020 a British MP said that it was 'shameful' that it took a pandemic for Boohoo to finally be taken to task for its workplace practices. Philip Dunne, chairman of the environmental audit committee, also said that the company had not met a pledge to sign up to the Ethical Trading Initiative which brings together retailers, unions and campaign groups to improve practice in supply chains. [26]

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References
  1. "Annual Report 2019" (PDF). Retrieved 22 June 2020.
  2. "'Incredible' Boohoo denying knowledge of factory allegations, says MP". the Guardian. 15 July 2020. Retrieved 16 July 2020.
  3. "board of directors – boohoo.com plc". Boohooplc.com. 24 February 2014. Retrieved 15 May 2017.
  4. "Family behind Boohoo.com pocket £240m from sale of company shares". The Guardian. 7 March 2014. Retrieved 24 December 2017.
  5. "Group Overview - boohoo.com plc". boohooplc.com. Retrieved 3 April 2019.
  6. Laville, Sandra (22 June 2019). "The story of a £4 Boohoo dress: cheap clothes at a high cost". The Guardian. ISSN 0261-3077. Retrieved 22 April 2020.
  7. O'Connor, Sarah (17 May 2018). "Dark factories: labour exploitation in Britain's garment industry | Free to read". www.ft.com.
  8. Bland, Archie; Kelly, Annie (4 July 2020). "Boohoo booms as Leicester garment factories are linked to lockdown". The Guardian.
  9. [www.bbc.co.uk/news/business-52380948 "Tops and joggers in as Boohoo lockdown sales boom"] Check |url= value (help). BBC News. 22 April 2020.
  10. Nazir, Sahar. "Boohoo responds to allegations of "forcing" Covid-19 positive to work - Retail Gazette".
  11. "Boohoo: fashion giant faces 'slavery' investigation".
  12. "Boohoo determined not to be another fashion sob story". The Guardian. 22 June 2014. Retrieved 24 December 2017.
  13. "Five strategies that helped boohoo.com grow annual sales by 51%". Internet Retailing. 28 April 2017. Retrieved 24 December 2017.
  14. "Boohoo sales rise following investment in technology and the customer experience". Internet Retailing. 29 September 2017. Retrieved 25 December 2017.
  15. "The Drapers Interview: Carol Kane and Mahmud Kamani, co-founders, Boohoo". Drapers. 6 May 2015. Retrieved 6 June 2019.
  16. "company overview – boohoo.com plc". Boohooplc.com. Retrieved 15 May 2017.
  17. "boohoo.com expands with acquisition of PrettyLittleThing". Internet Retailing. 14 December 2016. Retrieved 24 December 2017.
  18. "Boohoo online fashion retailer sees its profits double - BBC News". Bbc.co.uk. 26 April 2017. Retrieved 15 May 2017.
  19. "Fast-fashion chain Boohoo almost doubles sales in 2018". Financial Times. 25 April 2018. Retrieved 25 April 2018.
  20. "Boohoo remains in fashion as sales surge". 15 January 2019. Retrieved 16 January 2019.
  21. "Boohoo booms and Primark plummets - how has coronavirus really affected fast fashion?". Euronews Living. 22 May 2020. Retrieved 22 May 2020.
  22. Eley, Jonathan (17 June 2020). "Boohoo predicts revenue boost as it snaps up Oasis and Warehouse brands". Financial Times. Retrieved 17 June 2020.
  23. "Boohoo investigates supplier over poor conditions". BBC News. 6 July 2020. Retrieved 6 July 2020.
  24. "Boohoo & COVID-19" (PDF).
  25. Powell, Emma (10 July 2020). "SLA ditches Boohoo over worker allegations". www.investorschronicle.co.uk. Retrieved 13 July 2020.
  26. Butler, Sarah (15 July 2020). "'Incredible' Boohoo denying knowledge of factory allegations, says MP". The Guardian. ISSN 0261-3077. Retrieved 16 July 2020.
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