Sales at Boohoo are rocketing after the online fashion group embraced plus-sized models and started selling the latest bodycon dresses, miniskirts and swimsuits in up to a size 26.
Boohoo co-founder Carol Kane said the company’s “fashion for all” approach had fuelled growth at the group, which also owns the PrettyLittleThing (PLT) online brand. “We’ve taken a bodycon dress and put it on a size 10 model next to a size 20 [model],” she explained. “We want to get across that, whatever your body shape, you can wear the same dress.”
While established high street fashion names like Topshop, New Look and Monsoon are in retreat, business at Boohoo is booming. It has enjoyed huge growth by targeting young shoppers who prefer to buy clothes on their phone and increasingly take their fashion advice from social media “influencers” rather than Vogue and Grazia.
On Wednesday, Boohoo reported a near-50% surge in annual group sales to £866m. Pre-tax profits were up 38% at £59.9m in the year to the end of February, a strong performance that sent shares up 10% to 239p.
Boohoo was started by the fashion entrepreneur Mahmud Kamani and Kane in 2006. The duo, who had previously supplied other clothing chains, were quick to spot the opportunity to sell online and in little more than a decade have turned Boohoo into a multimillion-pound brand.
Since listing on the stock exchange in 2014 Boohoo has bought several other brands in a bid to repeat that success, including PLT – which was started by Kumani’s three sons Umar, Adam and Samir – Nasty Gal and MissPap.
With a marketing spend of around £80m last year, the company was quick to spot the impact influencers could have on the shopping habits of British teenagers and twentysomethings via Instagram and other social media. To drive shoppers to its website it has worked on collaborations with high-profile celebrities, ranging from the actress and singer Jennifer Lopez to the model Ashley Graham and footballer Dele Alli.
“Fashion is being driven by celebrity culture,” explained Kane. “These people are not models so come in all shapes and sizes.”
The fashion industry’s reliance on svelte models has always been at odds with reality, with the average British woman now wearing a size 16.
Kane said the brands had different points of view, with Boohoo covering all wardrobe bases from workwear to nights out, while PLT’s image is the “feel-good LA lifestyle … with palm trees and blue skies” that appeals to younger shoppers.
GlobalData analyst Emily Salter said PLT, which has 10.6m Instagram followers, had become the “jewel in the crown” and was expected to usurp its sister brand Boohoo in sales terms this year. PLT’s sales more than doubled to £374m in the last financial year.
“The impressive performance of PrettyLittleThing in particular is due to its emphasis on trend-led items and newness,” said Salter. “PrettyLittleThing has embraced the diversity and body positivity movement, for example in its popular collaboration with Ashley Graham, which has resonated well with its customers.”
The breakneck growth has forced the retailer to invest in infrastructure, including new warehouses in Burnley and Sheffield, and more will be required overseas if sales take off in America and mainland Europe. To that end, it recently appointed its first external chief executive, John Lyttle, who joined from Primark where he was chief operating officer.
Lyttle said it would be a challenge to maintain current growth rates but overseas markets would “have a big part to play”. Boohoo makes nearly half its clothes in the UK and Lyttle said he had already toured the factories it uses in Leicester following reports that workers were being exploited.
Given the size of the prize – Boohoo has less than 1% market share in the US and mainland Europe, which taken together is a £500bn a year clothing market – they have dangled a big carrot in front of Lyttle: his package includes £50m in shares on top of his annual salary and bonuses if the company’s stock market valuation rises by 180% in five years.
“I’ve spent the first six weeks getting around the business,” he said. “To keep growing at this rate, I’ve got a lot of work to do.”