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Boohoo revenue up in strong trading quarter

Online fashion retail group Boohoo recorded a strong start to its financial year, as customer’s interest in its stable of brands showed no sign of abating.

Group revenue for the three months to 31 May 2019 was £254.3 million, up 39% year on year – in the UK it grew by 27% and internationally the top line jumped by 56%.

Gross margin dipped slightly to 55%, but the business said it had a strong balance sheet with net cash of £194 million. The quarter also saw Boohoo acquire the brand and intellectual property of MissPap, another fast fashion player targeting young women.

John Lyttle, the group’s new CEO, commented: "The group has made a strong start to the year as we continue to disrupt and capture market share in the UK and internationally across all our brands.

“I'm delighted that the group topped the UK Hitwise rankings in May for the first time, demonstrating how our multi-brand strategy is really capturing our customers' attention. We have ambitious plans for the group, and continue to invest to ensure that our scalable multi-brand platform is well-positioned to disrupt, gain market share and capitalise on the global opportunity in front of us."

The group’s eponymous brand reported revenue of £123.5 million – an increase of 27% year on year – while its PrettyLittleThing division is catching fast in terms of top-line performance. Revenue for the quarter of £112.1 million was 42% up on the same period in 2018.

Nasty Gal’s revenue appears to be gaining momentum in all markets, too, up by 153% to £18.2 million. Overall, the group is expecting revenue growth of 25% to 30% with an adjusted EBITDA margin of around 10% for the full year, taking into account all brands.

While sales remain solid, potential distractions await for Boohoo. Earlier this week, a claim for £118.5 million against co-founder Mahmud Kamani was filed by the man who argues he created Boohoo’s website.

Richard Womack claims he is the “third founder” of the Manchester-based business, and he has brought a case against Kamani for what he says is a breach of an agreement to develop the Boohoo.com eCommerce site, including coding, database, integrated stock lines, “look and feel” of the platform, and the company logo.

Kumani responded to the claims saying Womack's claims are opportunistic and that his allegations are "are entirely without merit".

"No monies are due and owing to Womack," said a follow-up statement.

Essential Retail also reported, last week, that ex-Morrisons technology director Jo Graham has been named Boohoo’s new CIO.

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