Boohoo cuts over 1,000 jobs and crashes into debt after 13% sales drop
Gen Z fast fashion brand Boohoo has axed more than 1,000 jobs and crashed into debt as their losses soar to £160million.
The clothing company has insisted it is on the path to recovery after revealing a steep jump in annual losses and sales down by nearly a fifth.
The group reported pre-tax losses of £159.9 million for the year to February 29, against losses of £90.7 million the previous year.
Revenues tumbled 17 per cent to £1.5 billion, which the firm blamed on its ‘increased focus on profitability and difficult market conditions’.
While the group saw improved trading of its core brands – boohoo, boohooMAN, PLT, Karen Millen and Debenhams – they had a decline in sales by gross merchandise value (GMV) across these brands paring back from 9% in the first half to 4% in the final six months.
Mahmud Kamani (pictured), is the founder of Boohoo and group executive chairman
Love Island star Molly Smith, is one of Boohoo’s brand ambassadors
PrettyLittleThing’s founder Umar Kamani – who is the son of Mr Kamani – married Nada Kamani in a £20million ceremony last weekend
Pictured: boohooMAN CEO Samir Kamani, 28, at his brother Umar’s wedding in Hotel du Cap-Eden-Roc, in the French Riviera
The group said it was aiming for GMV growth in 2024-25 and is on track for annual cost savings of £125 million.
It comes just days after the billionaire founder’s son, Umar Kamani, enjoyed a lavish £20 million wedding at the exclusive resort, Hotel du Cap-Eden-Roc, in the French Riviera.
The three-day white-themed bash concluded with a grand firework display, accompanied by belly and fire dancers, as well as a lavish Indian wedding, complete with an extravagant feast, Bollywood music, and a pool party.
Guests even arrived to gifted Dior toiletries in their rooms.
Mr Kamani has not had a role in Boohoo since April 2023 and paid for the wedding out of his own personal expenditure.
Chief executive John Lyttle 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.’
The results showed active customer numbers down 11% to 16 million, while average order values also fell 3% and average order frequency per year dropped 9%.
Boohoo has faced pressure from online rivals such as Shein.
The figures follow further allegations over its manufacturing practices, with a BBC Panorama investigation earlier this year revealing Boohoo mislabeled items of clothing made in South Asia as ‘Made in the UK’.
Boohoo said at the time that it was an ‘isolated incident’ and impacted less than 1% of clothing supply.
Love Island star Molly Smith at her boohoo launch party in March
Fast fashion firm Boohoo has reported pre-tax losses of £159.9 million for the year to February 29, against losses of £90.7 million the previous year
The group revealed plans in January to close its Leicester factory and relocate operations, although it said this was not connected with the probe.
Around three years previously, the company overhauled its ethical practices after a supply chain scandal and allegations over factory staff pay and working conditions.
Guy Lawson-Johns, equity analyst at Hargreaves Lansdown, said: ‘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.’
He added: ‘And with customer key performance indicators continuing to trend in the wrong direction, it doesn’t look like a miraculous recovery is around the corner.’
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