Boohoo revealed stellar results, having managed to supercharge growth across all three of its brands.

Sales nearly doubled at group level, rising 97% to £579.8m while pre-tax profits were up 40% to £43.3m.

Pretty Little Thing was the star of the show, notching up a 228% sales increase to £181.3m. Boohoo’s own-brand sales rose 32% to £374.1m while new acquisition Nasty Gal’s revenue came in at £24.4m.

Crucially, the etailer did not reveal any margin reset following speculation that it had miscalculated the investment it needed to maintain growth.

The etailer’s phenomenal growth story had been questioned by those worried that it had underestimated how much investment was needed to keep it ahead of the fast-changing fashion game. Retail Week, among others, argued that it had not

In fact, Boohoo today revealed several tech updates it had invested in to superpower its growth, making sure that its technology is as fast-moving and forward-looking as its product itself.

New website platform

The etailer said that it had migrated its various regional websites to a new cloud-based platform. It added that the platform had already been proven to have “superior stability”, with no crashes during peak trading periods such as Black Friday and the days leading up to Christmas because of the increased bandwidth that the platform provides. 

This stability is, of course, increasingly expected by consumers as well as good for Boohoo’s topline – fewer crashes mean more selling time during peak trading – and should help lessen IT support and customer service costs.

The cloud also gives greater scalability, which is absolutely crucial given the etail upstarts on Boohoo’s tail and its lack of interest in establishing a bricks-and-mortar site – its website is a major part of its shop window and needs to be as responsive as possible.

Warehouse shift

Boohoo revealed that it had moved away from its plan to create a supersite distribution centre to house all three of its brands and instead Pretty Little Thing will transfer to a new Clipper-run facility near Sheffield in the first half of this year.

This decision, the etailer said, will help add the warehouse space it needs to support its growth plans. It added that it represented a “significant milestone as we develop a distribution network capable of generating £3bn net sales globally, in line with our vision to lead the fashion ecommerce market”.

“Automation should allow the etailer to offer next-day delivery on orders made before midnight at no extra cost”

Meanwhile Boohoo has ploughed investment into automating its existing Burnley-based distribution centre.

This automation will be focused on picking – previously done manually – and so will speed up Boohoo’s entire ecommerce operation. It should allow the etailer to offer next-day delivery on orders made before midnight at no extra cost. Currently, Boohoo offers next-day delivery for orders made before 10pm. 

Peel Hunt brokers Jonathan Pritchard and John Stevenson said that because it had chosen to row back on the supersite, Boohoo was “likely to open international distribution centres in Europe and/or the US”, and that they believed that path was “preferable to the supersite”.

Indeed, this decision offers Boohoo the flexibility to respond adaptively to a fast-changing market and set up smaller warehouses across the globe as countries’ revenue streams begin to take off. This makes its whole business model much more adaptable.

Influencers and Instagram

Boohoo makes the most of social media platforms, primarily Instagram, for much of its marketing. The Boohoo brand’s Instagram follower numbers doubled during the year, reaching 4.8 million, while Pretty Little Thing followers reached 3.3 million and Nasty Gal 2.6 million.

The brands’ Instagram presences feature their partnerships with influencers, and all three stepped up their efforts during the past year.

Nasty Gal’s marketing strategy has “focused on building and extending the number of bloggers and influencers… to reengage customer interest and promote brand loyalty”. Pretty Little Thing, in particular, has netted partnerships with super-influencers, the Kardashians.

This initiative, which chief executive Umar Kamani told Retail Week about at the end of last year, has linked the brand with the reality TV clan in the minds of both Pretty Little Thing shoppers and Kardashian fans, with both playing on the brand’s sexualised aesthetic to maximise the publicity the partnership provided.

While many young fashion etailers are similarly using social media, the Boohoo brands have really turbo-charged their relationships with influencers and in doing so have extended their reach across teenagers’ Instagram feeds.

Given the Gen Z tendency to be tied to a smartphone, this constant ticking over of brand touch points is a powerful tool when trying to persuade customers to part with cash for ultra-discretionary purchases.

App rollouts

Boohoo has powered up its focus on apps across its three brands.

The main Boohoo brand has added more country-specific apps and created a specific BoohooMan app for the UK, US and Australian markets while Nasty Gal’s app has also been rolled out across the same three territories.

Pretty Little Thing has focused its development efforts on a single app, which now accounts for 20% of its sales, up from 10% in the previous year.

As with its Instagram efforts, the ultra-focused apps are aimed at maintaining a presence on Gen Z’s phone screens and making sure that the etailer is front-of-mind at all times.