Boohoo losses hit £160m amid sales slump
The group attributed its sales decline to an increased focus on profitability, as well as the growth of its commission-only revenue model
Boohoo losses have widened to £159.9m in its full-year results, up from a previous loss of £90.7m, as revenues fell amid a challenging market backdrop over the period.In the year ended 29 February 2024, revenues fell by 17% to £1.46bn, down from £1.77bn the prior year.
As well as difficult market conditions, including inflation and weakened demand, the group attributed its sales decline to an increased focus on profitability, as well as the growth of its commission-only revenue model.
Elsewhere, its Gross Merchandise Value (GMV) fell by 13% to £1.8m, as trading continued to be hit by the difficult macroeconomic environment.
However, a “positive trend” was reported in the performance of its core brands: Boohoo; BoohooMAN; PrettyLittleThing; Karen Millen; and Debenhams External Marketplace. Decline across these brands slowed from (9%) in H1 to (4%) in H2, “showing a clear improvement in trajectory”.
There was particularly strong growth within the Debenhams marketplace. According to Boohoo, the capital-light, stockless model drove high margin growth, and it has expanded its customer proposition with more than 3,500 brands onboarded. The group also transitioned non-core labels to the marketplace, which led to an “improved performance” in H2.
Over the year, the group also completed two major capex projects, including automation at its Sheffield warehouse and improvements to its US distribution centre.
Looking ahead, the group said it will “continue to leverage the increasing efficiencies” generated by its investment in automation and capacity, with an ongoing focus on cost reduction, and is on track to deliver savings of £125m across cost of goods, supply chain and overheads in FY25.
It will also target GMV growth, as well as continued improvements in adjusted EBITDA margin.
CEO John Lyttle said: “Despite difficult market conditions, caused by high levels of inflation and weakened consumer demand, we made continued progress in the year. I am particularly encouraged with the ongoing trend of improved performance in our core brands which saw GMV down 9% in H124 and down just 4% in H224 demonstrating increasing momentum and validating our strategy to focus on these brands which are much loved by our customer base.
“We continue to take actions to deliver on our goal of bringing the entire group back to profitable growth. In FY24, we completed our investment cycle with the launch of our US distribution centre and the successful delivery of our Sheffield Automation project. Sheffield is already delivering significant efficiency improvements, which, together with the traction of Debenhams marketplace, is generating margin improvement across the group.”
He added: “We have also taken steps to transition several of our labels over onto Debenhams marketplace to drive enhanced profitability. This proved effective during the year and is something that will drive additional profitability going forward. These factors, combined with improving market conditions, give us strong confidence in our medium-term outlook.
“The group is now well positioned to return to growth, and we are focused on ensuring that growth is both sustainable and profitable. We will host a capital markets day in due course to provide more detail on our strategy, key growth drivers and the longer-term outlook for the group.”
