Business

Boohoo earnings up 37% as pandemic drives business online

Publicity over failings in supply chain did not appear to dent sales as revenue rose 41%

Signage on a Boohoo store in London. Boohoo forecast revenue growth for the 2021-2022 year of around 25 per cent File photograph: Ian West/PA Wire

Wed May 5 2021 - 09:03

British online fashion retailer Boohoo reported a 37 per cent jump in full-year core earnings on Wednesday, benefiting from the rise in digital shopping during the Covid-19 pandemic.

The group, which sells clothing, shoes, accessories and beauty products targeted at 16- to 40-year-olds, made adjusted earnings before interest, tax, depreciation and amortisation (ebitda) of £173.6 million pounds (€201.1 million) in the year to February 28th.

That was ahead of analysts’ average forecast of £171.3 million and more than the £126.6 million made in 2019-2020 financial year.

Unlike rivals that rely on stories which had to shutter for several months during coronavirus lockdowns, Boohoo was able to trade throughout.

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Publicity over failings in Boohoo’s supply chain did not appear to dent sales as revenue rose 41 per cent to £1.75 billion.

Low pay in factories

In September, Boohoo accepted all the recommendations of an independent review that found major failings in its supply chain in England after newspaper allegations about working conditions and low pay in factories in the Leicester area.

In March, the group revealed a major consolidation in its supplier base as it published a full list of British manufacturers to meet a pledge on transparency.

In January, Boohoo purchased the Debenhams brand out of administration for £55 million and in February bought the Dorothy Perkins, Wallis and Burton brands from the administrators of Arcadia for £25.2 million.

Boohoo forecast revenue growth for the 2021-2022 year of around 25 per cent, with the newly acquired brands expected to deliver approximately 5 percentage points of this growth.

It said trading in the first few weeks of the new financial year had been “encouraging”.

But it cautioned that the economic outlook remained uncertain and it expected the benefits from reduced returns over the last 12 months to begin to unwind this year, while still experiencing significantly higher carriage and freight costs. – Reuters

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