Boohoo may have reported its usual stellar set of results this morning, but there was one big difference.
This was the first update that included a full set of figures from its acquisitions of Pretty Little Thing in January and Nasty Gal in March.
Those investments seemed to pay off today, with Boohoo’s top line doubling in the six months to August 31.
While Boohoo itself chalked up sales growth of 43% to £181.8m, fuelled by the addition of new categories such as lingerie, maternity and kidswear and Boohoo Man, its acquisitions certainly made an impact on the top line.
So how responsible are its new brands for today’s growth – and how much more is to come?
Pretty Little Thing
Sales at the millennial-focused brand, established by Boohoo co-founder Mahmud Kamani’s sons Adam and Umar in 2012, shot up an astonishing 289% to £72.2m in its half year, with gross margin a healthy 54.8%.
The group picked out international sales as being particularly rosy: they were an astonishing seven times higher than in the first half of last year.
Boohoo joint CEO Carol Kane told Retail Week that she believed that growth was “mainly down to momentum”, but picked out marketing as one area that they brand had “executed very well”.
Pretty Little Thing has indeed harnessed the effect of the ultimate influencers, the Kardashians.
Its tie-up with youngest sister Kylie Jenner and its well-publicised Coachella party helped it boost its Instagram following to almost two million (up 35% in six months) which, with an audience comprised purely of millennials, has tangible business benefits.
This LA focus and sunny aesthetic is twinned with its work with UK-based influencers such as Love Island finalist Olivia Attwood, whom Pretty Little Thing quickly signed off after the conclusion of the hit television show.
“We are always looking at who’s on TV and tapping into that,” says Kane. “We have influencers on both sides of the pond.”
Kardashians aside, PLT is taking advantage of its international popularity by adding country-specific websites – it now has eight with the latest addition France – and improved delivery times in crucial territories such as the US and Australia as well as extending its app to the US market.
It is now focusing on establishing new tech, with current projects including building returns portals for international territories to make the returns process easier and more automated, and investing in personalisation, which it believes will lead to higher conversion rates.
Retail Week verdict
Pretty Little Thing is the fastest growing of all the Boohoo brands. Its stratospheric revenues over the past six months show the potential of combining the much-hyped brand with the more established Boohoo infrastructure.
Pretty Little Thing’s potential weak spot is the slew of millennial-focused etailers coming up behind it, but its LA-on-steroids aesthetic, Boohoo ownership and influencer marketing should keep those wolves from the door.
Boohoo’s acquisition of clothing retailer Nasty Gal’s IP in February was a shrewd move.
While it is still small fry in the UK, Nasty Gal has significant cachet in the US despite its bankruptcy, with founder Sophia Amoruso enough of a personality to have merited a Netflix drama about her Nasty Gal journey.
Nasty Gal is the most fashion-forward of Boohoo’s brands
The brand, by far the most fashion-forward of Boohoo’s stable and carrying the highest price points, has grown month-on-month since it was acquired.
Revenue exceeded projections and came in at £8.4m for the last six months.
Kane is also Nasty Gal’s chief executive and is focused on the brand’s two core markets – the US and UK.
She is making sure Nasty Gal is still front of mind for US consumers while boosting its appeal in the UK with outdoor advertising campaigns.
Nasty Gal also has an additional four country-specific sites, with Canada and Ireland added in the first half of the year.
While Boohoo acquired Nasty Gal’s IP in March, it had to design and manufacture new stock, creating a comprehensive range from scratch.
It expects the combined effect of its marketing campaigns and product range to fuel sales growth, but is not pouring the same resources into the brand as it is with PLT.
Retail Week verdict
Nasty Gal is a much smaller part of the Boohoo group and, if its leadership team is anything to go by, is not expected to achieve the same rapid levels of growth as its counterparts.
Kane’s role shows that Boohoo believes that Nasty Gal needs close supervision and is unlikely to achieve stellar growth in the near future.
That said, its vintage-inspired style provides a point of difference in a world of fashion etailers touting slogan T-shirts and bodycon dresses.