Boohoo’s tears over sales dive
PROFIT WARNING HAMMERS SHARES
A Bradford-born designer has been handed one of the top jobs at upmarket fashion giant Burberry. Daniel Lee, 36, was yesterday named as the firm’s creative director, replacing Riccardo Tisci who will leave this month after nearly five years. Last week, Burberry’s chief operating officer, Julie Brown, also announced plans to leave. SHARES in online fashion giant Boohoo plunged further yesterday as soaring inflation and the cost-of-living crisis saw it dive into the red.
The Manchester-based heavyweight said it had seen “weaker than anticipated consumer demand” and a “significant” rise in clothes being returned.
Sales in the six months to the end of August fell 10 per cent to £882.4million as the business swung from a £24.6million profit to a £15.2million loss.
And it warned sales were expected to continue falling at a similar rate for the rest of its financial year, with profit margins lower than previously forecast.
That spooked investors, with Boohoo’s share price tumbling more than 15 per cent, taking its crash since the start of the year to nearly 75 per cent – and more than 90 per cent since June 2020 when Covid lockdowns boosted sales.
Half-year revenues in the UK fell 4 per cent.
Boss John Lyttle blamed a “challenging economic backdrop weighing on consumer demand”.
But he insisted: “We have a clear plan in place to improve future financial performance.”
Russ Mould, investment director at broker AJ Bell, said: “Once again Boohoo feels like a very apt name for the fallen fast fashion firm. Today’s warning shouldn’t come as a shock given the backdrop the business is facing but that doesn’t make it any less sobering.”