There is fast fashion, and then there is what U.K.-based retailer Boohoo offers. While the reigning champions of fast fashion still need about a month to turn over their collections, Boohoo (and its associated brands Pretty Little Things and NastyGal) sees its ideas go from the drawing board, into production and onto shelves in as little as two weeks.
Fast fashion that is that much faster.
And, apparently, it’s much more in line with what customers want. Former fast-fashion champion, Sweden-based H&M, has been having a rough 2018, with flat sales and fashion editors wondering if the brand has “lost its cool.”
Boohoo, on the other hand, has seen explosive growth over the last several years, with group sales up 103 percent in the 10 months ending December 2017. In Q1 2018, the retail group reported revenues up 53 percent to £183.6 million ($246 million). It also saw an expansion in its target shopping demographic: women aged 16-30.
The growth the brand saw, according to its quarterly earnings release, was across global markets. Sales in the U.K. were up 49 percent, while global sales were up 60 percent. All in, Boohoo expects group revenue growth of 35 percent to 40 percent for the year.
“Our multibrand strategy is delivering above-market rates of growth globally. Significant market share gains have been achieved in all of our key focus markets, with our compelling combination of the latest fashion at incredible prices, backed by great customer service resonating strongly with our customers,” Mahmud Kamani and Carol Kane — Boohoo’s joint CEOs — noted in a post-earnings statement.
But merely surviving and thriving when their fellows in online retail in the U.K. and around the world have stumbled and struggled to do the same is a beginning for Boohoo, not the completed goal.
“The scale of group revenue is aligning with our ambition to become one of the dominant global online retailers,” Kane and Kamani noted, and Boohoo is very serious about becoming a best-in-class internet fashion retailer globally — to the extent that it is investing massively in its logistics infrastructure.
The goal, according to the firm, is the creation of a distribution network capable of supporting £3 billion ($3.97 billion) of net sales globally. It’s an ambitious investment, given that as of last year, the firm’s annual revenues were less than £1 billion (£580 million). But Boohoo is hot among its customer base, profitable and ready to invest in what will be popular tomorrow, instead of what it is today. Even if that investment has raised some eyebrows among investors.
“Boohoo’s ambition to be the best-in-class internet fashion retailer globally will come at a price, in our view,” RBC analysts said.
A price, notably, that RBC ultimately believes will be worth paying, particularly if Boohoo can continue to deliver as well as it has.
The company believes it continues to have an edge when it comes to delivering in the world of fast fashion gone digital, because it continues to be able to redefine what the “fast” part of fast fashion really means. Unencumbered by storefronts, the brand is uniquely able to move in an out of market and seasonal fashion trends in ways that are often eye-catching.
For a recent example, Boohoo has been one of many brands to leverage Pride Month as a retail event, with the offering of the 30-piece “Love is Love” collection.
“Boohoo brands wanted to come together to create a collection that was subtle yet bold. A collection that was for everyone,” noted Samir Kamani, CEO of BoohooMan.com, of the offering.
It’s a collection that can be swapped out as quickly as it came in, as Boohoo moves forward with promotions for the next season.
Fashion is a tough world. H&M had about a quarter’s worth of flat sales before some watchers were wondering if it was “out.” The challenge of the fast fashion space, in particular, is that it encourages customers to be a bit fickle, to change their minds and styles often. It’s a risky strategy for the retailer that gets caught in the fickleness they created in their customers and watches as they move on to a different fast-fashion player that is a little more current, or at least a bit quicker on the replacement track.
But Boohoo has been around since 2006 and is now starting to build steam with a global audience and a new lease on mastering distribution in its segment.
We’ll keep you posted on if they make it over that $3.9 billion in annual sales mark.