Boohoo sales decline as elevated returns plague fast fashion

No comments

Boohoo has recorded a decline in sales against strong comparables year on year.

Boohoo-site-on-smartphone-next-to-keyboard

Boohoo sales dropped 8% to £445.7m in the three months to May 31

Boohoo sales dropped 8% to £445.7m in the three months to May 31, but jumped 75% on a three-year basis compared with the pre-pandemic period.

The fashion group, which owns brands including Boohoo, PrettyLittleThing, BoohooMan and NastyGal, said that gross demand for its products remained in growth, up 9% year on year.

Net sales, however, were impacted by elevated returns rates as the product mix changed to include more occasionwear.

Boohoo added that UK net sales improved month on month and were in growth for the month of May.

The retailer has continued to move its production to near-shore markets to reduce freight costs, with a 10% increase in short-lead-time products allowing greater flexibility.

Boohoo also reported lower levels of inventory and tighter cost management to improve efficiency overall.

As international lags behind its home markets, the group has signed a lease for a new distribution centre in Elizabethtown, Pennsylvania, with go-live anticipated in mid-2023.

Boohoo chief executive John Lyttle said: “I am pleased with the progress we are making towards our strategic priorities, which is already having a meaningful impact operationally within the business.

“We have seen promising signs from the group’s sales performance in the UK, which has improved month on month in the period, and we are looking ahead towards our key summer trading season as holidays ramp up and customers look to the latest fashion from across our brands.

“Looking forward, we will continue to focus on optimising both our financial and operational performance to ensure the business is well placed to take advantage of future growth opportunities.”