Fast fashion firm Boohoo has said its sales slumped last year as it struggled against cut-throat competition and changing consumer tastes.
Boohoo sales plummeted 17 per cent to £1,46bn in 2023 and pre-tax losses jumped to £159.9m from a loss of £90.7m last year.
The group, like rival Asos, thrived during the pandemic-driven boom in online shopping, but as consumers returned to high street shops, it has faced a succession of challenges including supply chain issues, inflation, and more product returns.
Boohoo – whose brands include PrettyLittleThing, BoohooMan, Debenhams, Nasty Gal and Karen Millen – saw active customer numbers down 11 per cent to 16 million.
Average order values fell 3 per cent while average order frequency per year dropped 9 per cent.
The company’s UK market reported a decline in revenue of 16 per cent to £921.5m.
US revenues fell 18 per cent to £229.1m, and revenue in the rest of Europe dropped 20 per cent to £165.8m. Revenue in the rest of the world decreased by 30 per cent to £74.6m.
The Manchester-based firm also became embroiled in claims over its manufacturing standards, the latest of which featured allegations in a BBC TV programme that the company mislabelled items of clothing made in South Asia as “Made in the UK”.
Boohoo, who said it was an “isolated incident”, later revealed plans to close its Leicester factory and relocate operations, insisting the decision was unconnected with the scandal.
John Lyttle, Boohoo chief executive, said: “Despite difficult market conditions, caused by high levels of inflation and weakened consumer demand, we made continued progress in the year. The group is now well positioned to return to growth, and we are focused on ensuring that growth is both sustainable and profitable.”
Guy Lawson-Johns, analyst at Hargreaves Lansdown, said it did not look like a “miraculous recovery is around the corner.”
“Boohoo’s full-year results were a painful read for investors. Revenue declined at high double-digit rates across all regions, including an 18 per cent in the US, which is seen as the group’s pathway to major growth.
“For now, it remains a struggling company with a tarnished reputation, reflected in the group’s valuation, which has come down significantly over the last few years.
“Executing its back-to-growth strategy hasn’t been easy. And, as part of the drive for profitability, Boohoo has heavily invested in expanding capacity abroad where there’s greater room for growth.
“International markets, especially the US, hold the key to the group’s future growth, but extensive investment has so far yielded weak results.”
