Online specialism and acquisitions boost sales at the boohoo group
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Online specialism and acquisitions boost sales at the boohoo group

By GlobalData Retail 21 Jun 2021 (Last Updated June 21st, 2021 17:20)

The boohoo group saw a growth in sales amid the pandemic due to its online focus and brand acquisition and should continue the promotion.

Online specialism and acquisitions boost sales at the boohoo group
A key contributor to the group’s growth has been the acquisition of multiple new brands. Credit: viewimage / Shutterstock.

The boohoo group continues to be a star performer amid the pandemic, with its online specialism and young target audience allowing it to record an exceptionally strong sales increase of £118.3m to reach £486.1m in Q1 FY2021/22. The UK exhibited the highest growth, with the easing of lockdown restrictions towards the middle of the period driving increased demand as consumers looked forward to the recommencement of social events. Its ability to retain momentum despite the reopening of physical stores in April is impressive and highlights consumers’ ongoing preference for the online, as well as the retailer’s superior desirability and ability to tactically adapt its product offer. The rest of Europe was much more severely affected, with many countries experiencing ongoing lockdowns due to further waves of the virus. However, its efforts to expand in the US have been fruitful, with the country’s fast vaccine rollout and minimal restrictions allowing growth similar to that witnessed in the UK.

A key contributor to the group’s growth has been the acquisition of multiple new brands, having taken on Debenhams in January 2021 and Arcadia brands Burton, Dorothy Perkins and Wallis in February 2021. However, it must now focus on strengthening and differentiating these fascias to boost their appeal. Since Debenhams only closed its final stores last month, the boohoo group will not yet have seen the full potential of its online platform, but with the former department store previously heavily reliant on older shoppers, it must ensure it prioritises email and physical marketing over social media to steer these customers towards its new website. While the rescued Arcadia brands better complement the group’s existing portfolio and experience, it should avoid its usual tactics of relying on constant discounting to drive sales as this will only cause it to devalue the brands.

Following widespread criticism last year regarding its supply chain conditions, the boohoo group has accelerated its efforts to improve these aspects of its business, with its Agenda for Change programme giving it greater oversight of its sourcing and enhanced transparency. Its confirmation in May that it will be linking executive bonuses to its ESG improvements will also boost the validity of these changes and exhibit its commitment to investors. However, it must now also raise awareness of its efforts among consumers as well, since many will still be put off by the ethical issues unearthed last year, so it should start posting more information about its actions on social media to rebuild the brand perceptions.

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