Pandemic? Scandal? Boohoo seemingly weathered both with equal aplomb Wednesday as the fast-fashion e-tailer reported a 41 percent surge in full-year pre-tax revenues, boosted in part by the pandemic-driven boom in e-commerce.
The Manchester-based conglomerate, which also owns the BoohooMan, MissPap, Nasty Gal, PrettyLittleThing, Karen Millen, Oasis and Warehouse brands, as well as the newly acquired Burton, Debenhams, Dorothy Perkins and Wallis labels, raked in 1.7 billion pounds ($2.4 billion) in the 12 months through Feb. 28, up from 1.2 billion pounds ($1.7 billion) a year earlier.
Boohoo’s predominantly millennial and Gen Z patronage appeared to shrug off concerns about the company’s supply chain, which attracted scrutiny last summer over allegations of poverty wages and unsafe working conditions in the English city of Leicester and elsewhere. The furor sparked a three-month independent inquiry, which found “widespread if not endemic” problems due to Boohoo’s “weak” corporate governance. The pressure to clean up its act led Boohoo to create its Agenda for Change rehabilitation program, appoint several sustainability and ethical compliance positions and form the so-called Garment and Textile Workers’ Trust to serve as a grant-making vehicle.
The e-tailer upped the ante this year, announcing a sustainability strategy, known as Up.Front, which it says will serve as a “no-nonsense set of measurable targets” around creating eco-friendlier clothing, though how this will square with its business model of quantity over quality, race-to-the-bottom pricing and ubiquitous use of virgin synthetic materials is still unclear. In March it published a consolidated list of its U.K. suppliers, noting that it had audited the majority of them—unannounced and also in the evenings and on the weekends—at least twice in the past year, drawing as much praise as it did skepticism.
Still, CEO John Lyttle said in a statement that the firm is doing “everything within its power” to play its part in rebuilding a “thriving garment sector in the heart of the U.K.” and that the changes it has made are creating a “much stronger, more transparent and more sustainable business that will benefit everyone involved in the garment industry and the U.K. economy.”
While it’s unclear how Boohoo’s charm offensive will impact sales, it’s unlikely to hurt. Even as the company’s share prices tanked in the immediate aftermath of the Leicester imbroglio, its customer base jumped 28 percent to 17.8 million, defying commonly held notions of younger generations’ “woker” values and prognostications that cheap, disposable fashion is on the wane.
Consumers, eagerly availing themselves of the expanded offerings of activewear, loungewear and tops for the homebound, placed 27 percent more orders, or 53.4 million in all. And while Boohoo’s order frequency dipped by a single percentage point, the company’s basket size increased 8 percent from an average of 3.06 items to 3.32. The average order value, too, bumped up 6 percent to 46.06 pounds ($64.02).
The U.K. market continues to be the group’s best-performing, accounting for 54 percent of revenues and rallying 39 percent year over year to surpass 945 million pounds ($1.3 million). The rest of the world is catching up, however. The United States, in particular, showed Boohoo’s highest territorial growth rates, climbing 65 percent to reach 435.1 million pounds ($604.9 million).
“Over the last year, the group has made great progress, delivering another set of record results despite the challenges posed by the Covid-19 pandemic,” co-founders Mahmud Kamani and Carol Kane said in a statement. “We have made significant progress on our Agenda for Change program, with greater oversight of our supply chain, stronger governance and more transparency. We are embedding a new way of working and improving the sustainability of the group for the benefit of all stakeholders.”
Boohoo forecast 25 percent revenue growth for the 2021-2022 financial year, with its new acquisitions poised to deliver five percentage points of that figure. Business in the first few weeks of the financial year “has been encouraging,” it noted, though the economic outlook remains uncertain and it expects to see an “unwinding” of the benefits from this past year’s reduced returns, along with “significantly elevated” levels of carriage and freight costs.
Kamani recently told the Environmental Audit Committee at the House of Commons that Boohoo is considering linking its sizable corporate bonuses to measurable environmental, social and governance criteria, such as improved workers’ rights, after British lawmakers urged the e-tailer to “put its money where its mouth is” rather than focus on breakneck growth.
“I can confirm that this matter is being considered by our board,” he wrote in a letter dated March 23. “Our remuneration committee is looking at the details of how this might work in practice and have engaged specialist consultants to help us with this.”