The Boohoo Group, the British fast-fashion online retailer that bought the brand name and the e-commerce operations of the Debenhams department store chain in January, is using it now to launch what it claims will be the biggest national online marketplace for sporting goods as well as fashion, cosmetics and household items. It has set it up in cooperation with a French e-commerce service company, Mirakl.
The marketplace is starting with about 200 brands. Following Boohoo’s takeover of Debenhams’ selected assets for £55 million (€63.3m-$74.8m), in competition with Frasers Group, JD Sports Fashion and other candidates, Debenhams’ department stores were closed after a liquidation of their inventories.
Like Asos, the other major U.K.-based fashion online retailer, Boohoo has been performing less well than before because of rising costs, including higher marketing expenses partly related to its acquisition of Debenhams, and a slowdown in its growth. Its share price declined by 10 percent after the company released its financial results a couple of weeks ago for the six-month period ended Aug. 31.
Its adjusted pre-tax earnings fell to £63.8 million (€74.3m-$86m) during the period from £79.4 million a year earlier as revenues rose by 20 percent to £976 million (€1.1bn-$1.3bn), missing markets forecasts of £1 billion (€1.1bn-$1.3bn). Ebitda fell by 5 percent to £85 million (€99m-$114m).
Boohoo said it now expected full-year sales to rise by between 20 and 25 percent, down from previous guidance of 25 percent. The adjusted profit margin was revised down to 9.0-9.5 percent compared with earlier guidance of 9.5-10.0 percent.
Sales growth slowed in the second quarter, falling to 19 percent in the U.K. from 50 percent in the previous three months. In the U.S. it was down to 9 percent from 40 percent. Boohoo cited return rates reverting to pre-pandemic levels, physical stores reopening, consumer uncertainty and pandemic-related disruption hitting international delivery timeframes. However, the rate of gross sales growth increased in September as compared to the second quarter, as consumer demand recovered.
