Boohoo.com mulls Pretty Little Thing acquisition

ONLINE fast fashion retailer boohoo.com has said it is considering the acquisition of another online fashion retailer, Pretty Little Thing, as it celebrates a 129% rise in half year profits.

£30m turnover Pretty Little Thing, based in Ancoats, was founded by boohoo boss Mahmud Kamani’s sons Umar and Adam in 2012.

Boohoo, which listed on the stock market in 2014, had an option to acquire the business for £5m or less before March 2017 and today said it is in the process of evaluating a potential acquisition, the related management incentive and how the business will be best integrated and managed as part of the boohoo group.

Both fashion businesses specialises in the so-called ‘social generation’ – men and women under 25 – and boohoo now has 4.5 million active customers across the world, up 28% on a year ago.

Its continued and growing popularity was reflected in the company’s financials today, which show a 40% increase in turnover to £127.3m – international sales now make up 36% of revenue – and an impressive 129% increase in pre-tax profits to £14.4m for the half year to the end of August.

While retail margins continue to reduce, as a result of third party revenue to other channels and retailers, marketing spend decreased to 6.3% of revenue compared to 12.6% in the comparable half year, as the company stimulated growth through greater use of price and delivery promotions.

Mahmud Kamani and Carol Kane, joint chief executives, said: “Through our constant focus on what matters to our customers, together with our investment in technology and operational improvements, we will continue to deliver profitable growth.”

The pair said they expect a tougher second half of the year but that overall full year revenue growth would stand at between 30% and 35%.

“Following the success in the first half of the year we will continue to look for opportunities to invest in marketing campaigns and our customer proposition to drive future sales growth and improve customer lifetime value. We will also be making significant investments in our IT systems and Ecommerce platforms. Consequently EBITDA margin for the full year is expected to be around 11%,” they said.

Based on Dale Street in the city centre and with its warehouse in Burnley, boohoo said it has £67m cash on its balance sheet.

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