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Carol Kane: Comfort is key to Boohoo's lockdown success

Boohoo Group’s lockdown success is a result of pivoting its party and workwear product offering to athleisure and loungewear, group co-founder and executive director Carol Kane told Drapers.

The group announced improved year-on-year growth sales in April through the coronavirus crisis today, despite an initial period of mixed trading in March. 

Boohoo Group’s revenue grew 44% to £1.23bn for the year to 29 February, compared with the same period last year. Profits before tax rose by 54% to £92.2m. 

Kane told Drapers strong sales during the lockdown were a result of the group’s agility in adapting the product offering across its seven brands (Boohoo, Boohoo Man, PrettyLittleThing, Nastygal, Miss Pap, Coast, and Karen Millen) to reflect coronavirus consumer habits. 

She said: “We’ve made sure we have had appropriate inventory for working from home and comfy items. The sales went away from party dresses and, at this time in the year, we’d normally selling vacation wardrobes and festival items. That hasn’t happened.” 

Instead, the group has seen an increase in sales on athleisure, hoodies, joggers and nightwear. 

“We’ve been working with our supply base to swap inventory around and have been able to do that. We didn’t have any downtime in the warehouses so have been able to hold up that distribution,” said Kane. 

However, she noted that workwear dresses have still been selling well for one of the group’s newest acquisitions, Karen Millen: ”Those forever pieces and investment dresses, which would normally be traditional workwear, have still sold. Blazers less so but the dresses still have, which was a bit of a surprise for me.” 

The crisis has accelerated the group’s plans to introduce new casual categories for Coast and Karen Millen. It acquired the online business of both brands in August last year

A second release of luxury loungewear for Karen Millen made with recycled cashmere has sold well, said Kane, as have knitwear items.

She added: “For Coast, we were already working on changing a little bit of the identity because it’s quite a niche brand about occasionwear. And that then felt like it was going to get hit the hardest [by coronavirus] with no occasions to go to. 

“We had already been forceful in making the old and new Coast team think about other categories. We had already started introducing a lot of separates, and now trouser sales and top sales have gone up at Coast.” 

Boohoo kept its warehouse up and running throughout the crisis, while others paused or closed their online operations. The decision was driven by the group’s warehousing structure, Kane told Drapers. 

“We put in social distancing measures within about 24 hours of lockdown, but you have to recognise that with our Burnley warehouse it’s around 2 million sq ft and is partly automated. You pick in a row per floor so you’re pretty isolated anyway.” 

The group has also introduced further safety measures, including distancing markers, hand sanitiser, staggered shift hours and closure of the warehouse gyms. 

Kane said the capacity was initially affected by a reduction in workforce as the group sent home vulnerable workers, with full pay. However, this has now been resolved and distribution is back to “full service”. 

Nonetheless, Boohoo is experiencing some inbound delays of stock as a result of having to switch from passenger air freight to cargo air freight. 

Through the crisis, the group has continued to pay suppliers for all orders, and has set up an emergency fund to help suppliers through the pandemic. 

Payment terms remain at 14 days, a rate which was introduced last year. 

Kane said: “We have a healthy balance sheet. Coming from the supply side [of the industry] I understand that cash is king and you want your partners to be there for you. If you pay them faster, it helps with their supply chain as well.” 

The business has adapted its sourcing and manufacturing to reflect the changing situations in each country globally: moving production from China to Europe when the virus first started and now moving Europen and Indian production back to China as the Western world remains in lockdown. 

Kane is confident that Boohoo Group is well suited to meet the changing consumer demands in the face of the coronavirus crisis. 

“We are already reacting by moving away from our previous best sellers to other products,” she said. “We have reacted in terms of our marketing strategy to be more lifestyle-driven doing things like pilates, meditation classes and DJ sets across our social channels to bring the vibe of the brand to the consumers.”  

The group confirmed that is has sufficient financial headroom to weather the economic impact of coronavirus. It had £241m net cash at year end. 


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