Discounting will continue to be a “big part” of Boohoo’s strategy, the young fashion etailer’s joint chief executive Carol Kane said today.
“We have invested a lot in price and promotions and shoppers have responded well to it, both in the UK and abroad,” said Kane, speaking to Drapers after Boohoo revealed its sales and profits rocketed in the first half of 2016.
Gross margin fell by 480 basis points to 55.3% as a result of the investment.
“A promotional market has become the norm, particularly in the online space; it is part of shopping online,” explained Kane.
“You can do promotions online in a clever way, but it can be more of a challenge for bricks-and-mortar retailers as you can look distressed if you are in promotion all the time. Trade on the high street is tough, but promotions are a big part of our strategy.”
Boohoo has delayed the delivery of its heavier knitwear and coats due to the warm September weather. But Kane said there has been a positive response to early autumn trends, including utility, sports lux, grunge and lingerie as outerwear.
“We’ve just come out of a strong summer season and that momentum will continue into autumn,” she added. “We’re playing our cards close to our chest but we’re very agile, so if we have any extreme weather conditions in October and November we can react.
“We’re keeping our transeasonal collections longer than traditional bricks-and-mortar retailers. We’ll delay our heavy coats for a while longer.”
Kane said there had been no change in behaviour from the Boohoo shopper since the Brexit vote in June.
The etailer, which now sells in 200 markets worldwide, grew its active customer base by 28% on last year to 4.5 million people. The business credits the growth to its expanding product range, which now includes kidswear.
“[Kidswear] is something we’ve thought about for many years, but we recently did some customer profile studies and we have a high percentage of mums in our customer base so it was a natural progression for us,” explained Kane.
“It only went live yesterday but we already have some indication of what our bestsellers are.”