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RetailX Brand Index 2019

RetailX Brand Index 2019

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Boohoo Group on what makes it successful

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Boohoo says its fast take-up of trends helps it to stay ahead of the market for its target customers
Boohoo says its fast take-up of trends helps it to stay ahead of the market for its target customers
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Boohoo Group on what makes it successful

As Boohoo Group once again reports strong growth in sales and profits, we take a look at its half-year figures to see what the company puts it down to. In other words, what is the secret of its success?

 

Boohoo Group today reported sales of £395m in the six months to August 31 – 50% up on the same time last year – and said it was planning for group sales of £3bn as it looks to achieve its ambition of leading the fashion ecommerce market. Boohoo sales of £209m were 13% up on last time, but the strongest growth came from its PrettyLittleThing (£138.6m, +134%) and NastyGal (£17.7m, +118%) brands. Customer and order numbers grew across the brands. Pre-tax profits of £24.7m were up by 22% on last year.

 

Boohoo.com and PrettyLittleThing are both Top250 retailers in IRUK Top500 research.

 

The UK market remained the group’s largest market with sales of £234.0m up by 43% on the same time last year. But faster growth came in the rest of Europe (£51.2m, +72%) and US (68.1m, +74%) markets.

 

Joint chief executives Mahmud Kamani and Carol Kane welcomed record sales and profits as the group’s brands expanded internationally and at home. "We achieved market-leading growth in all markets, with rest of Europe and the USA being particularly pleasing. Growth in the UK, our largest market, remains very strong."

 

Its products

Boohoo group says that its brands "design, source, market and sell great quality clothes, shoes and accessories at unbeatable prices." This, it says, has helped it to grow from a single brand "into a major multi-brand online retailer, leading the fashion ecommerce market for 16 to 30-year-olds around the world," with 11m active customer accounts. Today, it says, "our offering changes daily, with hundreds of new styles added and the very latest fashions appearing within days or weeks of trends being spotted by our fashion experts and offered to our customers at affordable prices. The breadth of the range makes boohoo a destination to which customers keep returning to find their desired items with ease."

 

Expansion through acquisition

Boohoo Group bought the PrettyLittleThing and Nasty Gal brands last year, which it says gave it brands with shared customer values. Their fast growth has helped the retailer boost its profits and sales.

 

Operations and logistics

Boohoo Group is putting a distribution network in place that is capable of generating £3bn in net sales around the world. In the last half-year it moved its PrettyLittleThing distribution to a new site in Sheffield - although this resulted in one-off costs of £6.4m related to the the costs of operating two sites alongside each other, and the costs of moving stock between the sites. The retail group is also extending its Burnley Boohoo distribution centre, which will have "a significant element of automation to drive efficiency savings" and is expected to be up and running next year.

 

It has also added faster delivery times and more delivery options, as well as making refunds faster: customers now get their refund as soon as the courier has collected their parcel.


Brand engagement

Partnerships with celebrities and influencers, from Paris Hilton to Zendaya, have helped it to raise brand awareness in new markets. Boohoo now has 5m followers on Instagram, 2.9m on Facebook, and 0.5m on Twitter, while Nasty Gal has 2.8m Instagram followers, and PrettyLittleThing has 6.3m Instagram followers and 1.4m on Facebook - the latter up by 40% in 12 months.

 

Customer numbers increased by 15% to 6.7m over the year, with order frequency rising by 2%: customers order an average of 2.15 times a year, though they buy slightly less than they did last year. Items per basket fell by 4% to 3.06.

 

International

The retailer has 17 country-specific boohoo websites, eight PrettyLittleThing sites and six Nasty Gal sites – and plans for more, and more payment options for overseas markets, in the current financial year. New returns options were introduced for international sites.

 

Mobile

The group is updating its Boohoo app, and has both iOS and Android apps for PrettyLittleThing and Nasty Gal.

Merchandising

Boohoo says it has improved gross margins on its products by controlling stock more tightly, selling through its products, and improving the customer proposition.

 

Image courtesy of Boohoo Group

 

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