Fast fashion etailer Boohoo revealed that its pre-tax profits doubled last year, as US sales soared 140%.
Joint bosses Carol Kane and Mahmud Kamani termed the period to February 28 “momentous”.
Crucially, it barely covers the sales brought in by Pretty Little Thing and Nasty Gal, both acquired in the first two months of this year.
Kane and Kamani labelled the acquisitions “a step change in the size, structure and operation of the group” and there is no doubt that the acquisition of Nasty Gal should bolster Boohoo’s US credentials.
Next year’s figures will show the impact of the two acquisitions.
But in the meantime, how do Boohoo’s numbers compare to its competition, fellow British fast fashion outfits Asos and Missguided? Retail Week takes a closer look:
Asos’s international and UK sales have followed the same trajectory for the last four years, with international bringing in a bigger slice of the pie every year.
However group profits have failed to keep pace at the pre-tax level, reflecting one-off costs, and slowed in its last financial year to £32.7m.
However Asos’s ‘continuing’ profit before tax and exceptional items was up 37% to £63.7m.
Boohoo’s international and UK revenue streams again follow a similar pattern as Asos but the other way round, so that the UK generates more sales. The US, where Boohoo now owns Nasty Gal, should help drive international growth.
Although profit growth has not kept pace with sales growth, the trajectory is more aligned than at Asos.
Although Boohoo has already revealed its 2016/17 results and so is a year ahead, as it were, its profits almost match those of Asos even though sales are but a fraction of its rival’s.
Missguided’s figures are the most irregular of the bunch, with UK sales far outstripping international revenues.
Profits, which in 2012/13 amounted to £11m have been up and down over the year and were a paltry £0.3m last year due to massive investment in projects such as Missguided’s store estate.
Writing for Retail Week, Boohoo chairman Peter Williams questioned the logic of fashion etailers embarking on bricks-and-mortar roll-outs.
For those who subscribe to the ‘sales are vanity, profits are sanity’ school of thought, Missguided’s numbers will serve to back up that thinking.
But retail is an unpredictable industry, and fashion arguably the riskiest segment within that. If the fortunes of sector-leading businesses like these were easy to predict, well, it wouldn’t be half as much fun.
Perhaps Missguided’s foray into bricks-and-mortar may be the exception that proves the rule.