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Delivery delays, returns and international carrier costs hit Boohoo profits


Boohoo Group has reported a 11% drop in revenue in the four months ending 31 December 2022, with delivery disruption, elevated return numbers and freight and shipping costs impacting the fast fashion etailer.

“Extended delivery times compared to pre-pandemic levels continue to affect the proposition,” Boohoo said.

The fashion retailer’s chief executive John Lyttle explained that Boohoo’s performance was “in line with expectations and reflects the normalisation of the channel shift online over the last 12 month”. He predicts that cost inflation will “begin to moderate in the second half of the year”.

Boohoo also stressed in its interim results that revenue was up 56% over the last three years and it would continue to “optimise operational performance through efficiencies and cost savings”. The company will focus on refining its supply chain, as well as tightening its stock management.

Tight inventory control has already helped improve speed and flexibility within its global supply base in the financial quarter, reducing inventory by 27% year on year.

The group is also investing in its Sheffield hub. The first phase of the £125m automation project is now live, with capacity expansion planned and expected payback within five years.

But it was reported at the end of last year that its Wellingborough distribution centre will close at the end of February, putting around 1,000 jobs at risk.

According to reports in Drapers, the 287,634 sq ft distribution centre on the Park Farm Industrial Estate is closing as a cost-saving measure. There has also been reports that 100 jobs will go at Boohoo’s London head office.

While in the US, its first distribution centre is expected to go-live mid-2023. It will cover 95% of US, providing delivery within three days compared with the current 10. In October, Boohoo announced DHL Supply Chain will manage this new US distribution centre.

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