Boohoo.com announces first equity funding since IPO

Online fashion retailer reported booming quarterly sales and raised its annual forecast

Boohoo said it now expects group revenue growth for the year ending February 2018 to be about 60 per cent.

Boohoo said it now expects group revenue growth for the year ending February 2018 to be about 60 per cent.

 

Boohoo. com announced the first equity funding since its 2014 initial public offering (IPO) as the UK online fashion retailer reported booming quarterly sales and raised its annual forecast.

The company plans to raise as much as £50 million (€57.6 million) for expansion by selling as many as 36 million shares to new and existing institutional investors, it said in a statement.

Boohoo also brought forward its scheduled sales update from Thursday morning, showing that first-quarter revenue more than doubled.

The retailer is tapping surging demand for its shares, which have almost quadrupled in the past year as investors have latched onto its formula of offering fashionable own-brand goods to a target market of 16- to 24-year-olds.

Beaten expectations

After failing to meet sales growth targets in the first year after its IPO, Boohoo has consistently beaten lofty expectations.

Money raised in the share offering will be used to fund the construction of a 600,000sq ft warehouse as the company seeks to meet rising demand.

The new site will provide more than £1.5 billion of net sales capacity, Boohoo said, in addition to an estimated £1 billion of net sales that can be supplied from its extended site in Burnley, northwest England.

Boohoo said it now expected group revenue growth for the year ending February 2018 to be about 60 per cent, ahead of its previous forecast of “approaching 50 per cent”. It didn’t change a projection for an Ebitda margin of about 10 per cent.

PrettyLittleThing, an online fashion seller acquired at the start of this year, had “exceptionally strong revenue growth” in the first quarter, the company said.

US fashion label Nasty Gal has made a promising start since Boohoo bought it out of bankruptcy, with revenue growing strongly month on month, it said.