Friday 19 April 2019

Paris chic: Boohoo revives the noughties with new campaign

Boohoo fashion group is going back to the noughties, with a campaign featuring one of the original fashion influencers, Paris Hilton. Photo: Getty Images
Boohoo fashion group is going back to the noughties, with a campaign featuring one of the original fashion influencers, Paris Hilton. Photo: Getty Images

Bloomberg

Boohoo fashion group is going back to the noughties, with a campaign featuring one of the original fashion influencers, Paris Hilton.

After Next upgraded its 2018 profit forecast, Boohoo raised its forecast for full-year revenue growth on Wednesday to between 38pc and 43pc from 35pc to 40pc.

Boohoo's performance - it also reiterated that it expects to report an Ebitda margin of between 9pc and 10pc - is particularly reassuring given the concern that the switch to a new warehouse for its PrettyLittleThing brand had disrupted sales.

But for the whole online retail industry, revenue growth comes at a cost: internet-based retailers must invest in providing customers with the best service, and extensive distribution infrastructure.

Boohoo is no exception to this rule: capital expenditure jumped by 50pc in the six months through August, and the company expects to spend as much as £60m in the fiscal year. Luckily it can afford it: the retailer had net cash of £155.6m at the end of the first half.

But Boohoo's high rating means it can't afford any slip ups. And its spending will ramp up further over the next few years. The retailer's latest campaign features the strapline "do your thing".

To maintain its stellar valuation, it will need to do that - and more.

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