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Boohoo: Growth and agility

Carol Kane

Carol Kane

Carol Kane, Joint Chief Executive, boohoo group, spoke to Emma Herrod about the company’s growth and scaling up to £3bn in sales.

Fashion group boohoo continues to report monumental growth but still sees itself as a “tiny, small business”. Its revenue over the past financial year reached £579.8m, an increase of 97% on the previous year. Its latest figures, for the 6 months to 31 August 2018, show that it is on track for an increase in group revenue of between 38% and 43% over the year to 28 February 2019. This is with an adjusted EBITDA margin of between 9% and 10%. Profit for this 6-month period rose by 56% on the previous year.

The boohoo group has ambitions, though, to raise its share price by 180% over the next five years, something which incoming Chief Executive John Lyttle will be awarded a bonus for. The group is also upping the stakes operationally with new warehousing space and automation capable of coping with £3bn in sales while also enabling it to push through orders faster and introduce later cut-off times.

Part of the company’s past expansion has been achieved through a mixture of natural and organic growth off the back of the consumer move from the high street to online retailing, as well as its own marketing efforts, explains Founder and Joint CEO Carol Kane. The launch of boohoo into international markets and its move from a single to a multi-brand strategy through acquisitions has further boosted recent growth.

Its original brand designs and sells the latest fashion trends to 16-30-year-old, value-oriented customers (the site is updated with hundreds of products each week), while its Nasty Gal acquisition in February 2017 allows it to target shoppers looking for an “edgier” style. Nasty Gal originated in the US and is relatively unknown in the UK. The boohoo group also owns a 66% stake in the celebrity-inspired fashion site PrettyLittleThing, which was set up by the sons of boohoo Co-founder Mahmud Kamani.

The multi-brand strategy has also seen it move into new categories and expanding to include menswear – which also has its own brand identity delivered through boohooMan – beauty, gifting and “a bit of homewares”, such as pumpkin candle holders at Halloween and Christmas cards. It is also diversifying with curve, petite and tall categories on and developing a larger size range for Nasty Gal. Its multi-brand strategy also means that the group can “take commercial learning across brands and countries,” says Kane, explaining that boohoo carries around 30,000 styles, Nasty Gal has 5,000 to 6,000 lines and PrettyLittleThing “has doubled its range year-on-year”.

Boohoo now operates localised, native-language sites in France, Germany, Spain and Italy, as well as sites in English with local currency in the US, Australia, Ireland and Scandinavia. Kane says that 40% of sales are from international markets, with boohoo leading the charge overseas.
All of these customer orders are fulfilled from the UK and Kane doesn’t see a need for distribution centres overseas yet. They will come, though, as the company scales up, and sooner than if it had remained as a single brand. “In the next few years we’ll be looking at DCs overseas,” she says.

There are “new territories on the roadmap”, too, but no specific countries that Kane is willing to announce yet. “There is lots to do in the markets we are currently in,” she says, especially since the business sees itself as “tiny” in all the markets in which it operates and with capacity for “loads of growth”. It is organic growth in these areas alone that Kane believes will take the business close to its future sales target.

The business sees itself as “a new kid on the block” in terms of the fashion industry but a “veteran” in ecommerce having launched the online operation in 2006 following years of the founders running a wholesale fashion business.

Along with infrastructure in place to handle £3bn in sales, the group also has a vision to be the leading fashion ecommerce company for 16-30 year olds. Kane believes that the business has already achieved this in the UK but it has aspirations to lead in other markets, too.

Swift growth hasn’t put pressure on operations, as Kane says that overheads have grown organically alongside the rise in sales. “There comes a point where you start to leverage that overhead in terms of buyers, more designers, more studios, more throughput in the studios in terms of photography, more ecommerce management in terms of managing the publishing of that stock. So, actually, in terms of growing your international territories and growing the fashion footprint and the growing offer has naturally had the effect of growing the overhead alongside that,” she says.

The public issue in 2014 helped to grow the profile of the firm within the ecommerce industry and, at the same time, Manchester and the North West were themselves on the map in terms of ecommerce so recruiting the necessary skills as the business grew has not been a problem. This has been helped by its company culture and the chance for everyone to be a shareholder in the business, she believes.

According to Kane, ensuring that warehousing and the supply chain can cope with the growth has been the easy part of scaling up supply and operations. This has been achieved alongside taking boohoo from a single business to four brands over the past two years. “Scaling is built into our model,” she says, adding that she’s confident that the business can continue to maintain this.

Part of the scaling up is being achieved through the automation of its DC in Burnley, which, when it goes live next year, will enable the retailer to increase last order cut-offs through postcode sorting and faster processing. Kane says this is a “big project”, and it’s not long since PrettyLittleThing was integrated into the warehouse and then, due to growth, was moved out to a 3PL-run facility in Sheffield.


When asked about maintaining flexibility and agility, Kane says that because she and fellow founder Mahmud Kamani are aware of the need to remain agile, they have not put “too many layers of management in”. There is also autonomy at quite a junior level, she explains, so people can “just get on with it”. A lot of the team is home grown, too.

The business has to remain agile through its supply chain as well and be able to switch products fast. “The nature of us as entrepreneurs,” she says, referring to herself and Kamani, “is that we’ve always had this flexible and agile approach which means we don’t confine ourselves to doing things in a certain way and we’re open to change in the business. We do recognise that there’s always a need to be agile and improve on what you are doing today and what you can do to make it better for the consumer”.

She believes that if you explain and really articulate why things are done in a certain way, teams will buy into it, they will embrace it, they will love it, and they execute it in the same way.

“There are some good reasons why we’ve had this growth and success and it’s not through following other etailers,” she explains. “We’ve carved out our own way.”

Boohoo is also keen on the test, repeat, learn, fail, put it right, test principle, but as Kane comments, she doesn’t see the need to be rigid in a fast-growing online business that’s still a new industry. There will still be loads of change, she says. From being a business that used a technology platform to supply fashion, boohoo has become something else: it’s a logistics and a customer service business. “It really has become a service company,” says Kane, “serving the consumer.”

She believes, though, that for all the different service and order fulfilment choices that the brands offer consumers, as long as boohoo remains true to its four pillars of selling great fashion at great prices, fantastic quality and ethically sourced direct to the consumer then everything else can change around that.


It is also through understanding its customers, their lifestyles and their price tolerance that the company has grown. “We think of them at every stage,” says Kane. This extends to muses for the different brands, sourcing and the user experience. Some 75% of visits are from mobile devices so the company examines how this connects with other channels – including its important social channel – through content creation for consumers’ lifestyles and customer services. This is shown through the price point – such as the boohoo meal deal promotion whereby customers can buy shoes (starter), dress (main course) and a bag (dessert) for £30.

Speed is important to the young customer base as well and this is reflected in the late order cut-off point, which is currently 11pm, and delivery. Aftercare resonates with its customers with investment in customer services through social channels, predominantly Twitter and Instagram.

Boohoo aims to respond to customers within an hour on social media, rather than the 24 hours through other means. Its customers “are very loud and clear” on social media, says Kane, explaining that they are just as quick to tell the business that it is doing something right than it is doing something wrong.

Customers are texting, using chatbots and speeding up customer services on social media. International customers expect customer service agents to speak their language. They are also using FAQs when they don’t want to ‘speak’ to anyone. What boohoo’s customers don’t want to do is talk to customer services on the telephone.

The retailer therefore is aiming for “best-in-class customer service” and Kane explains that it is delivering this by listening to customer concerns, resolving then as quickly as possible and remembering that the customer is always right.

Boohoo has a young workforce, too, with 27 being the average age of it employees (excluding the executive committee and management team). “We employ our customers so we have their voice in the business,” says Kane, “and this is invaluable. This business is run by a management team but it’s not done without having that youthful voice coming up to the top table with a set of ideas that our customers would have”.


Scalability, flexibility and additional functionality along with the drive for international expansion and the move to being a multi-brand business drove boohoo group to migrate to a new web platform in its last financial year.

The decision was taken to move all of its brands, except PrettyLittleThing, from different web platforms including Magento and Venda (now Oracle NetSuite) to the Salesforce Commerce Cloud (previously Demandware) platform and utilise its personalisation engine to ensure that the right content is being served to customers in different locations, including across the US, where a shopper in Los Angeles is served different products to a customer in New York, for example, explains Kane.

The challenge for the business during the migration was the change in skill set as people had to carry out their day-to-day roles while integrating new systems, seamlessly. Magento developers were moved over to work with PrettyLittleThing, which remains on its Magento/in-house-built hybrid platform since it is not fully owned by boohoo. Kane explains that this keeps the feel of PrettyLittleThing different to the other brands. This was all being carried out while acquiring Nasty Gal.

Much of the development work in terms of skins, creative and commercial trading is carried out in-house by the boohoo group in Manchester using the ecommerce functionality of Demandware.

All international pricing and trading is carried out in Manchester, too, with content creation, customer insight, marketing and social outreach done at local offices in Paris and Los Angeles. Further offices are planned for Berlin and Sydney. These local offices also provide an advisory role, informing the business of things that will have an impact on trading, such as Macy’s running a certain promotion.

Central control of ecommerce means that brands can move very fast and “within minutes” if necessary. “If we want to change a price point or we want to run a sale in two hours’ time then we can do that, but we do that from the operating ecommerce team that we have in Manchester,” says Kane.

She explains that everything from the marketing and tech teams feeds into ecommerce, meaning that the Manchester team pushes content to the web several times a day. This process, says Kane, involves the marketing team feeding in everything “in terms of this is what we are doing with marketing, this is what we’re driving, these are the messages, and the trading team then comes in and says these are the price points, this is promo, this is what we’re looking at. The ecommerce team has to deliver all of that and the tech team has to support any kind of technical changes, pricing files and everything that has to happen at that point in time.”

She believes that the business has “become more flexible with scale because we’ve had to. The marketplace demands a certain level of flexibility to keep up and to grow, and to become important you have to be ready to flick the switch and change something very quickly.”

She cites a topical conversation about a swimsuit worn on Love Island that was carried out on social media. Even if the conversation is happening at 9pm, boohoo makes sure that the firm is part of the conversation and can make changes to any of its sites. “That’s across all of the brands as well,” adds Kane.

The company’s latest innovation is a mobile app with increased functionality which it has developed in house and is currently testing. Kane says “we won’t launch it at peak” but instead it expects to launch the app in March, initially to boohoo customers, before rolling it out to other brands and countries and translating it into other languages. The app includes more functionality, choice of payment method, as well as visual search, with push notifications enabling customer service notifications such as order confirmation to be sent directly to the app. The firm also hopes the app will drive order frequency.

March is also when retail veteran John Lyttle joins the boohoo group as Chief Executive. Primark’s Chief Operating Officer will receive a bonus of up to £50m if the boohoo group share price rises by 180% over the next five years. This would see the group’s stockmarket value rise to £5.6bn. During Lyttle’s eight-year tenure at Primark turnover has grown by 158% to over £7bn and operating profit has grown by 116% to £735m (to the year ended 16 September 2017).

Kamani and Kane will remain on the boohoo group board with Kamani moving away from the day-to-day running of the business to concentrate on longer-term strategy. Kane will continue to lead the product and creative vision along with the multi-brand strategy and product proposition.

With a new CEO lined up who has a track record of taking a fashion business through its next stage of growth, infrastructure for £3bn annual sales target and guidance that sales will grow by at least 25% a year, and an international footprint and DC landscape which will be different to the boohoo of today, the group certainly has its work cut out for it. It will need its strong ambition, fast and flexible supply chain, and agile and entrepreneurial spirit to achieve its next stage goals. And I’m sure that Kane, for one, will thoroughly enjoy the journey.

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