Boohoo booms as it overtakes struggling M&S

BOOHOO is now worth more than high Street stalwart Marks & Spencer after it upgraded forecasts for the third time in a year.

The fast fashion website, which was founded in 2006 and is listed on the junior AIM market, has seen its valuation soar to £ 3.9bn, eclipsing FTSE 250 member M&S, which is worth £3.6bn.

The combined value of the stakes held by Boohoo cofounders Carol Kane and the Kamani family has risen to more than £1bn.

The contrast in the companies’ fortunes illustrates a changing of the guard in retail as nimble online businesses overtake high Street chains.

Boohoo sales rose 44pc in the four months to the end of December as it was boosted by a strong Christmas and standout performances from its Boohoo and Nasty Gal brands. The firm, which also owns Pretty Little Thing, saw a 44pc increase in sales to £473.7m in the four months to New Year’s eve.

Chief executive John Lyttle said: ‘All of our brands have performed exceptionally well and delivered strong market share gains. The newly acquired brands, Miss Pap, Karen Millen and Coast, are showing great promise and open different target markets for the group.’

Boohoo was originally set up in Manchester, selling clothing to high Street shops before it decided to cut out the middle man and go direct to the consumer. The online store is now known for selling jackets, dresses and jeans for around £12, and tops and T-shirts for as little as £3, to predominately female customers aged 16 to 30.

By contrast, while M&S has been a feature of the British high Street for more than a century, it has struggled to stay relevant in recent years.

It also had a terrible 2019, falling out of the FTSE 100 as bosses admitted their attempts to turn the company around were heavily delayed.