Online fashion retailer Boohoo has reported double-digit hikes in both earnings and sales in its last fiscal year – with soaring sales positioning PrettyLittleThing to overtake the company’s namesake brand in terms of UK market share in 2019.
In the 12 months to 28 February, pre-tax profit surged 38% to reach GBP59.9m (US$77.5m) from GBP43.3m in the prior year. Gross margin increased 190 basis points to 54.7% from 52.8%.
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Group revenue for the year rose 48% to GBP856.9m from GBP579.8m, while sales at the retailer’s namesake brand were up 16% to GBP434.6m. At PrettyLittleThing, revenue reached GBP374.4m, jumping 107% on the prior year. Meanwhile, revenue at Nasty Gal surged 96% to GBP47.9m.
The group reported strong revenue growth across all geographies, with UK sales up 37% and international up 64%. In the US, sales jumped 79%, while the rest of Europe saw a 74% jump and the rest of the world a 34% rise.
Today’s results are the first under new CEO John Lyttle who joined Boohoo from value fashion retailer Primark last month. “I am very excited to have joined the Boohoo group at this key stage of its growth, with the group’s disruptive and proven business model having delivered yet another excellent set of financial and operational results,” he said.
“In my short time within the business, I am delighted to have been able to meet a number of hugely talented people and have already been able to see many parts of the business. This has confirmed my belief and optimism that the group’s investments into its brands and infrastructure have allowed it to develop a scalable multi-brand platform that is well-positioned to disrupt, gain market share and capitalise on what is a truly global opportunity.”
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By GlobalDataTrading in the first few weeks of the new financial year has been encouraging, Boohoo added, noting group revenue growth for the financial year is expected to be 25% to 30% with an adjusted EBITDA margin of around 10% and capital expenditure in the region of GBP50-GBP60m.
PrettyLittleThing poised to overtake sister brand Boohoo
Emily Salter, retail analyst at GlobalData, notes that whereas clothing players such as Topshop and New Look are failing to convince young consumers to purchase, the Boohoo group has gone from strength to strength.
“These impressive full-year results dull the shine of Asos’ recent H1 results, reporting 16.6% UK revenue growth as the brand matures, in comparison to the less established nature of the Boohoo brands. PrettyLittleThing remains the jewel in the group’s crown as its revenue grew by 106.6% to GBP374.4m, now just GBP60.2m behind Boohoo and is set to overtake Boohoo in terms of UK market share in 2019.”
The impressive performance of PrettyLittleThing in particular is due to its emphasis on trend-led items and newness, Salter says, noting the retailer also acknowledged the success of its ‘shape’ ranges (Tall, Petite, Shape, Plus).
“Although many of its competitors offer niche ranges, including Asos and Missguided, PrettyLittleThing has embraced the diversity and body positivity movement, for example in its popular collaboration with Ashley Graham, which has resonated well with its customers. Another point of differentiation that PrettyLittleThing has recently introduced is its increased commitment to sustainability, as it launched an extensive Recycled range of clothes in line with its normal price points, and a collaboration with recycling company ReGain to promote clothes recycling. The brand is therefore able to capitalise upon the growing number of consumers who wish to make more environmentally conscious choices without turning their backs on fast fashion.”
According to its website, Recycled by PrettyLittleThing’s aim is to “rework unwanted, worn out materials and give them a second chance.”
The collection this season is formed from recycled fabric off-cuts and plastic bottles.
? Recycled by PrettyLittleThing ? Turning waste into this seasons most-wanted ? Shop now ?? https://t.co/jaykyDTMP0 pic.twitter.com/Ht954Bsd98
— PrettyLittleThing (@OfficialPLT) 23 April 2019
Meanwhile, last month Boohoo announced the acquisition of online pureplay MissPap, giving the group access to another vehicle to drive strong growth as the Boohoo brand matures.
“For the acquisition to be successful, MissPap needs to offer a unique proposition with clear points of differentiation due to the highly competitive nature of the young fashion market,” Salter says.
