Boohoo raises funding to pursue potential M&A opportunities during Covid-19

Boohoo has raised £197.7 million in share placings to enable it to quickly take advantage of any merger & acquisition (M&A) opportunities in the global fashion industry over the coming months, it has been announced. The move is believed to give the online retailer approximately £500 million cash at its disposal as it seeks to accelerate its vision to lead the fashion eCommerce market globally.

With many fashion sectors experiencing a huge drop in revenue during the Covid-19 crisis, the future is uncertain for some high street retailers. In recent years, Boohoo has expanded its portfolio through M&As, including PrettyLittleThing and Nasty Gal in 2017 and MissPap, Karen Millen and Coast last year.

These deals have helped the brand grow its revenue by 44% in the year ended 29 February 2020 and substantially increase its number of active users to around 14m across the world. It now appears to be putting itself in a position to quickly take advantage of further opportunities to grow its online business amid the uncertainty of the Covid-19 crisis.

Boohoo commented: “The group intends to use the net proceeds of the placing to take advantage of numerous opportunities that are likely to emerge in the global fashion industry over the coming months. The Group continues to review a number of possible M&A opportunities and will update shareholders as required.

“Boohoo has demonstrated that its platform is capable of integrating high-quality fashion brands. The recent acquisitions of the Karen Millen and Coast brands evidence its successful transition of brands to a pure online proposition on its scalable multi brand platform; plugging them into its test and repeat model, and leveraging the Group's infrastructure and insight into the fashion eCommerce market.”

The retailer added that while there was a marked decrease in sales when the Covid-19 first struck in mid-March, its year-on-year revenue increased in April, and continues to trade well so far in May.