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17 June 2020

There’s Nowhere to Hide from Boohoo

Saul Fulda, Investment Analyst

Boohoo, the fast fashion online retailer is at it again. Just a few weeks after acquiring the remaining 34% stake in Pretty Little Thing, the company has agreed to acquire the online businesses of Oasis and Warehouse for a mere £5.25m. 

The Group, which is debt-free, raised around £200m through a placing in May and holds over £350m of cash on its balance sheet. Moreover, Boohoo has a knack for integrating external brands into its business, with Karen Millen and Coast being the latest examples - it took Boohoo just eight weeks to fully relaunch both brands into the business. Ultimately, this has been at the crux of the company’s phenomenal growth over the past few years. 

By agreeing to solely purchase the online segments of Oasis and Warehouse, Boohoo has safeguarded its exclusive online presence. Alongside the rocketing online sales figures which have emerged since COVID-19, this points towards the same conclusion: Boohoo is the leader in a fast-growing market. 

The Group has brushed off short seller ShadowFall Research’s recent report and delivered fantastic growth across all brands and geographies, spearheaded by the US. Together with the Group planning the construction of an overseas warehouse, which will drastically improve its supply chain and delivery times, this should further whet investors’ appetites. 

The Group’s management stress the uncertainty which lies ahead, but with expectations for 25% sales growth and further merger and acquisition opportunities in the pipeline, the outlook is promising.

Please note that investments and income arising from them can fall as well as rise in value and you may lose some or all the amount you have invested. Past performance and forecasts are not reliable indicators of future results or performance. Please note that this communication is for information only and does not constitute a recommendation to buy or sell the shares of the companies mentioned. 
 
There’s Nowhere to Hide from Boohoo
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