Fast fashion pioneer is worth £2bn as sales leap

ONLINE fashion retailer Boohoo is fast becoming a dotcom giant after profits almost doubled in the past year.

The Manchester-based group said profits rose 97pc to £30.9m in the year to February 28, while revenue jumped 51pc to £294.6m.

Meanwhile, its share price has climbed more than 295pc in the past 12 months, making the company worth about £2.1bn.

Boohoo’s growth has been driven by encouraging 16 to 24-year-olds to snap up its fast-changing fashions, which can cost as little as £8 for a dress. It has tapped into the growing number of teens and twentysomethings who want to wear the latest fashion but at budget prices. Carol Kane, joint chief executive, said the brand had rocketed by working with so-called social media ‘influencers’, who share pictures of themselves wearing Boohoo clothes on sites such as Instagram and Snapchat.

‘We’ll work with the kids in university that have the most influence,’ she said. ‘If they like something they snap it and post it. They record every moment of their lives. That’s just what people do now. They see something, they like it, they share it. And before you know it you can go to an event where there’s only a couple of hundred people, but once they have shared their image you are hitting thousands.’

Boohoo was founded in 2007 by Kane and co-chief executive Mahmud Kamani, and listed on the London Stock Exchange in 2014. Its model of offering cheap, trend-driven clothes has been piling the pressure on traditional retailers which are struggling to compete.

Unlike High Street rivals such as Topshop and New Look, Boohoo does not have to pay for a sprawling store estate with soaring business rates. Instead it can keep costs low by ordering clothes in small batches, and only ordering more if customers are buying them.

That strategy has helped UK revenue grow 33pc, more than 50pc in Europe and 140pc in the US – where it launched a Boohoo bus college tour. Revenue grew 40pc in the rest of the world.

Neil Catto, chief financial officer, said: ‘If it’s selling well we get more of it. It means there’s a lot of new products on the website. It does set us apart from High Street retailers. We can offer a much broader range that changes quickly. It’s what fashion is about.’

The firm has 5.2m active customers. At the end of last year, it snapped up rival website Pretty Little Thing – which was founded by Kamani’s sons. Shares closed down 2.2pc, or 4.25p, to 185.5p.