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Boohoo warns on profit but reports record Black Friday

The topsy-turvy nature of retailing was highlighted again this morning as online fashion retailer Boohoo.com reported a record week of trading around November's Black Friday but warned that full-year profits will fall short of current market expectations.

Sales at the business for the four months to 31 December 2014 were up by 25% to £50.8 million, although following the launch of a new fully responsive website and a concerted marketing push trading was said to be "lower than anticipated".

Boohoo suggested that sales were down on estimates, principally because of the heavy promotional activity on the UK high street arising from unseasonably warm weather throughout the autumn.

The Black Friday sales weekend, starting on 28 November, also stretched out the period of discounting on the UK high street into early December, but this new markdown event on the British retailing calendar has resulted in a number of retailers reporting unprecedented sales peaks.

House of Fraser said on Tuesday that its Black Friday online sales were up by over 125% on the previous year and up by almost 70% on its previous largest online sales day, and Boohoo indicated today that the Black Friday week represented its best ever seven days of trading.

Joint CEOs Mahmud Kamani and Carol Kane remarked: "Whilst the period proved a challenging trading environment, we have still grown the business by 25%, albeit short of our previous expectations.

"We are very confident that our fashion credentials, pure-play online model and the significant investment in infrastructure will continue to drive growth in the UK and internationally."

Boohoo said it anticipates growth for the second half as a whole to be in line with the 25% growth for the four-month period to 31 December, which means EBITDA margin for the full year is set to be in line with the first half at approximately 10%.

Sainsbury's and Majestic Wine Christmas trading

Meanwhile Sainsbury's and Majestic Wine have also published their Christmas trading statements, showing hits to sales and margins respectively.

The supermarket said that total retail sales for its third quarter were down 0.4%, excluding petrol, while like-for-like trading dipped 1.7%. The business indicated that there were over 29.5 million customer transactions in the seven days before Christmas, the three days to 23 December resulting in the Sainsbury's online team delivering more than 110,000 orders – a record Christmas for eCommerce.

Drinks retailer Majestic Wine, meanwhile, said that the ten weeks of Christmas trading between 28 October 2014 to 5 January 2015 garnered a year-on-year sales rise of 3.7%. Like-for-like UK store sales growth was 1.1%, as the company invested 50 basis points of gross margin to ensure pricing remained competitive.

Steve Lewis, CEO of Majestic, commented: "Majestic delivered like for like sales growth of 1.1% in a difficult Christmas trading period characterised by promotional activity and we are now focused on delivering our final quarter's trading. 

"We anticipate this competitive pricing environment will continue throughout much of 2015."

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