The online clothing retailer has continued to thrive as high street competitors finally start to re-open
Boohoo benefits from consumer spending in lockdown
- Online retailer snaps up Oasis and Warehouse for £5.3mn as it upgraded its profit forecasts after a 45% surge in sales during coronavirus crisis
- Investors will have also noticed US revenue, up by 83%
- Share price responded positively this morning with an 8% rise and is trading at a significantly higher level than pre-crisis
- Recommendation: With an ever growing diverse range of brands providing a range of products and catering to different consumer groups we maintain our ‘Buy’ recommendation
As the high street starts to re-open, a well-timed trading update from online retailer Boohoo will get management from the high street casting envious eyes in their direction. The first quarter update reported that, despite trading being mixed at the peak of the crisis, from mid-March to April revenue for the overall period was up 45% and they expect to beat market expectation on growth for the year, giving guidance for growth of around 25%. The group also reported increased demand for loungewear and athleisure, reflecting the changing habits of consumers during the lockdown period.
The deal to buy Oasis and Warehouse, two well-known high street names, highlights the group’s strategy of taking brands with poor sales from the high street and transferring them onto its sophisticated internet platform, including its supply chain and infrastructure. Overall, the group continues to maintain a good market position among younger consumers, a good growth track record with plenty of potential to increase market share over the coming months.
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