Boohoo has unveiled skyrocketing sales and profits at the half-year mark, aided by some of its more recent acquisitions.

The online fashion powerhouse posted an 83% surge in pre-tax profit to £45.2m during the six months to August 31 spurred by a 43% leap in group sales to £564.9m.

All its brands – Boohoo, BoohooMan and PrettyLittleThing – were “firing on all cylinders”, according to co-founder Carol Kane, but Nasty Gal – the brand it bought out of bankruptcy in 2017 – was the stand out star. 

It delivered an eyewatering 148% sales increase to £43.9m and its number of active customers spiked 112%.

nasty gal screenshot 01 aug 2017

Nasty Gal has been Boohoo group’s standout brand this year

Kane attributes the success of Nasty Gal to Boohoo’s strategy of rapidly increasing its SKU count from 400 at the time of acquisition to “thousands” today, as well as heavily marketing the brand in the US and UK through pop-up stores and influencer tie-ups, such as the recent collaboration with supermodel Emily Ratajkowski.

It is an impressive and rapid turnaround for the business, just two years after Boohoo bought its IP following the brand’s Chapter 11 bankruptcy in the US.

Boohoo will hope to replicate this success with Karen Millen and Coast, two of the brands which, alongside MissPap, it acquired over the last half-year.

Karen Millen and Coast were bought by Boohoo in a pre-pack administration deal in August for £18.2m.

However, where previous acquisitions like Nasty Gal, PrettyLittleThing and MissPap fall into Boohoo’s existing young fashion stable, the pair are less natural bedfellows.

So why did Boohoo decide to buy them?

“We’d already had an eye out for slightly different brands to the ones we had in our portfolio,” says Kane.

“Yes, of course, we are opportunistic, but it was also part of the overriding strategy for the group, which was to look at a more elevated brand at some stage.”

Adapting to the pureplay world

Boohoo acquired the IP for the brands. It will run the businesses as pureplay retailers, with online trading set to commence early next month. Karen Millen and Coast stores are in the process of closing down.

The fashion etailer did not acquire either brand’s existing stock pools, which are now being sold off in closing down sales online and in-store.

Emrata x NastyGal

Nasty Gal has collaborated with supermodel Emily Ratajkowski

Boohoo will retain the product and brand teams from both retailers, who will continue to be based in London.

“We don’t want to lose the brand DNA, although it does need working on and improving,” says Kane.

Coast and Karen Millen will continue to target the same customer demographic and its brand handwriting will remain the same with Coast focusing on occasionwear and Karen Millen “everyday elevated style”.

However, in a similar way to Nasty Gal, the product range and development will be developed at a much faster pace under fast-fashion pioneer Boohoo.

“We will go through a slightly different expansion to the current product strategy, by claiming what they’ve got that works and adding to it to make those brands more successful online. When the Karen Millen and Coast brands initially went online they offered hundreds of styles, and we will need to grow those hundreds into thousands over the medium-to-longer term to get it to be the success it needs to be,” says Kane.

Broad appeal

So could further acquisitions be on the horizon to broaden Boohoo Group’s appeal?

That all depends on the growth of Karen Millen and Coast, says Kane.

“Of the seven brands, we’ve got MissPap, Boohoo, PrettyLittleThing and Boohooman to cover the 16-24 demographic; Nasty Gal is slightly older and taps into 20- to 30-somethings, and then you’ve got Coast and Karen Millen above that.

“That means you’ve actually covered off quite a lot of customers in that existing stable, so once you grow the inventory across all of those brands and think about the international profile of them all there’s a lot of potential.”

Critics may say that winning back spend from Karen Millen and Coast customers, who spend hundreds on products rather than the low price points at Boohoo, is not as straightforward as launching a fashion collaboration with Love Island’s latest cohort of contestants.

However, Boohoo is keen to build its brand portfolio and broaden its customer appeal by doing so.

And, as today’s results have shown, the fashion etailer is not to be underestimated.