boohoo upbeat after sales jump 45%

ONLINE fast fashion retailer boohoo.com came through the vital Christmas period with flying colours.

Sales in the three months to December 31 were up 45% on the previous year, with strong growth in all territories – UK (+45%), Europe (+33%) and Rest of the World (52%).

The Manchester-based group, which 12 months ago said its autumn sales had not lived up to hopes prompting sharp falls in its share price, has rebounded well since and with 10 months of its financial year gine, has amassed sales of £164.4m, an increase of 39% on last year.

The company, which specialises in the so-called ‘social generation’ – men and women under 25 – now has 3.9 million active customers across the world, up 33% on a year ago.

While reatil margins have been reduced, as expected, as a result of planned investments in price and the customer offfer, marketing spend reduced as a percentage of sales.

Joint chief executives Mahmud Kamani and Carol Kane, said: “”Trading in the four months to 31 December 2015 has been very encouraging across all regions, with overall revenue growth of 45% (49% at constant exchange rates) .

“We have continued to optimise the mix of promotional and marketing spend to drive strong retail growth, reducing the proportion of marketing expenditure, offsetting the 290bps decline in retail gross margin, which includes the adverse impact of exchange rate movements. Gross margin has also been impacted by 130bps due to the growth in third party sales.

“Our investments in the customer proposition have resulted in higher conversion rates, increased order frequency and lower customer acquisition costs. Operational successes include the new warehouse extension entering into full service, giving us the capacity required for business expansion, and the new UK app, which has improved the overall shopping experience.

“We remain confident of trading in the remaining two months of the financial year and now expect revenue growth for the full year to be marginally above previous guidance of 30% to 35%.  We are trading in line with current market expectations for EBITDA as we continue to invest in driving growth and building market share across our key markets.”

Based on Dale Street in the city centre and with its warehouse in Burnley, boohoo said it has £58.7m cash on its balance sheet.