Boohoo’s Christmas shopping splurge on PrettyLittleThing
ONLINE fast fashion retailer boohoo.com has bought a majority stake in the rival online fashion retailer owned by the son of its founder.
It has paid £3.3m for a 66% stake in 21 Three Clothing Company Ltd, trading as PrettyLittleThing, which was founded by boohoo boss Mahmud Kamani’s sons Umar and Adam in 2012.
The company pointed out that this is pro rata to the March 2014 option agreement when it listed to acquire 100% for £5m.
The remaining 34% will be used to incentivise chief executive Umar Kamani and senior management and is subject to the management team remaining with the company for five years and achieving revenue and EBITDA targets.
In 2022, boohoo will have the option to acquire this remaining 34% at market value.
PrettyLittleThing, based in Ancoats, started out as an accessories only website, before introducing a clothing range in 2013.
It has enjoyed rapid growth in the two and a half years since then, with half year revenues hitting £19m to the end of August 2016 – an almost 200% increase on the previous half year.
Next year, Boohoo, which is based on Dale Street in the city centre and has its warehouse in Burnley, will invest in PLT’s operations, including its warehousing, to further boost its performance.
Both fashion businesses specialises in the so-called ‘social generation’ – men and women under 25 – and boohoo now has around 4.5 million active customers across the world.
Umar Kamani, chief executive of PrettyLittleThing, said: “PrettyLittleThing has been a great success story over the last couple of years. Our youthful management team enables us to engage directly with our target market, pushing the boundaries of innovation in the celebrity led world of fast fashion. As part of the boohoo Group, we will continue to build on our strong brand positioning and we are excited by the prospect of continuing to anticipate and set trends.”
Peter Williams, chairman of boohoo, said: “PrettyLittleThing was always going to be a natural fit with boohoo. Umar and his team are to be congratulated for creating a fantastic brand, which complements boohoo’s own inclusive and innovative brand, and we are delighted to add this fast growing, international business to the group.
“We believe this is an excellent opportunity to extend the group’s overall customer appeal through two distinct, complementary brands while further enhancing the group’s strong growth trajectory. We look forward to building on PrettyLittleThing’s success and we welcome Umar and his team to the group.”
Boohoo also announced strong trading across the Black Friday weekend and said peak season trading continues to be encouraging – so much so that it has increased its guidance for full year revenue growth to between 38% and 42%, against previous guidance of between 30% and 35%.
Investment bank GCA Altium and law firm TLT advised boohoo, while Zeus Capital acted as nominated adviser and broker. Pannone Corporate, led by partner Tim Hamilton and including Craig Geraghty, Brogan Pani and Jack Harrington, advised PrettyLittleThing on the deal.