Boohoo announces one-third profit increase after foreclosure buying boom Business News

Boohoo’s profits soared by more than a third last year, following a boom in online sales linked to the coronavirus lockdown.

The fashion retailer told shareholders on Wednesday morning that pre-tax profits rose 35% to £ 124.7million for the year, through February 28.

Revenue jumped 41% to £ 1.74 billion, he added.

The massive increase in trading was facilitated by Boohoo’s acquisition of Debenhams and three brands in Sir Philip Green’s Arcadia portfolio, the group said.

Earlier in 2021, he had bought Dorothy Perkins, Wallis and Burton following their fall into insolvency, and had bought Warehouse and Oasis out of administration last year.

Some 2,450 people lost their jobs under the Arcadia deal, which covered companies’ inventory, e-commerce and digital assets, but not the remaining 214 physical stores. Around 260 head office positions have been retained.

John Lyttle, Managing Director of Boohoo, said: “Our newly acquired brands are re-energized and made relevant to today’s consumer in a larger market.

“We are very excited about their potential and are already seeing the first rewards of their growth.”

Boohoo said he expects 25% sales growth in the current year, with 5% coming from new acquisitions. While discussions at the start of this fiscal year had been “encouraging,” the positive effects of reduced customer returns were likely to wane and the future remained uncertain, the bosses added.

Demand has increased under the Covid-19 lockdown measures, but the pandemic has hit basic categories such as dresses and outlet clothing, they said.

The business update comes after a year that saw Boohoo harassed by a supply chain scandal over labor abuse and poor working conditions at its Leicester factories.

Senior managers “were fully aware that there were very serious problems” with the treatment of workers and attempts to remedy the situation have not progressed quickly enough, a review ordered by the company revealed last September.

“Boohoo felt no real sense of responsibility for the workers at the Leicester factory and the reason is very human – it is because they are largely invisible to them,” concluded Alison Levitt QC.