If fast-fashion e-tailer Boohoo.com PLC had a mascot, it would be the crying laughing emoji.
The British retailer, known for its lightening fast deliveries, trendy selection and affordable prices, pushed its stock up by 260 percent in 2016. Revenue soared 40 percent to £127.3 million for the first half of the year ending August 2016, compared to the previous year. If you don’t know the e-commerce site, it’s probably because you don’t have a young adult at home. But with a performance like that, it’s time to take note.
In fact, Boohoo is increasingly compared to industry darling Zara. While the rest of the industry is trying to figure out how to keep up with that company’s 21-day product turnaround cycle, boohoo has figured out how to slash that timetable in half. It’s done so by taking a page from Zara’s playbook; about half of Boohoo’s production takes place in the U.K.—a necessity given its demanding 16 to 24-year-old consumer base.
“Being able to source great product at a sensible price has been one of Boohoo’s great strengths,” acknowledged Boohoo chairman Peter Williams via The Guardian. “Celebrity trends can be interpreted very quickly and the stock turns [over] at a fantastic rate…it’s a very dynamic model.”
Last month, Boohoo announced a strong Black Friday weekend and positive sales through December 14th, the latest date for which results have been released. The strong sales prompted the retailer to adjust its guidance. It now expects to deliver revenue growth between 38 percent and 42 percent in fiscal 2017, compared to its previous forecast of between 30 percent and 35 percent.
Analysts expect the growth trend to continue.
And the company is expanding.
The company acquired a 66 percent stake in PrettyLittleThing’s parent company, 21 Three Clothing Company Ltd, for 3.3 million pounds ($4.05 million).
PrettyLittleThing’s revenue grew by over 400 percent to 17 million pounds ($20.88 million) in the financial year ended Feb. 29 2016, compared to 3.1 million pounds ($3.81 million) during the previous year. The company delivered revenue of 19 million pounds ($23.34 million) in the six months to Aug. 31, 2016. Boohoo expects PrettyLittleThing to achieve revenue growth in excess of 150 percent in the financial year ending Feb. 28, 2017.
Umar Kamani, CEO of PrettyLittleThing, attributes the company’s growth in part to the management team’s age, which allows it to be tapped into what’s happening in youth culture.
For Boohoo, it means even more reach into its target demographic and growth into other geographical areas.
“We believe this is an excellent opportunity to extend the group’s overall customer appeal through two distinct, complementary brands while further enhancing the group’s strong growth trajectory,” said Peter Williams, chairman of the Boohoo Group. “We look forward to building on PrettyLittleThing’s success and we welcome Umar and his team to the Group.”
Next up may be the acquisition of Nasty Gal.
Boohoo bid $20 million for the bankrupt e-tailer, which would give it access to millennials in the U.S.
Founded in 2006 by Sophia Amoruso, Nasty Gal today remains one of the most popular apparel brands for millennial shoppers. Known for its trendy pieces, Nasty Gal heightens consumers’ wardrobes with evening dresses and one-piece swimsuits.
Nasty Gal predicts the auction process and sale will conclude by the end of February.