Fast fashion firm Boohoo has set its sights on a £100m profit after emerging from years of consecutive losses.
The London-listed firm, which owns Debenhams, Karen Millen and Pretty Little Thing, said its turnaround plans are “significantly ahead” of schedule after producing its first pre-tax profit since 2021.
Boohoo has endured a rocky few years, facing intense competition from fast-fashion competitors like Shein and Temu, but has embraced swingeing cost cuts as part of its reinvention as an online platform for third-party brands.
The online retailer posted a £28m profit in the six months to the end of August, overturning last year’s £18m loss, though revenue edged down three per cent to £410m.
Boohoo told shareholders it hopes to deliver a £100m pre-tax profit and generate “significant cash” in the “medium term”.
The Debenhams brand saw 14 per cent revenue growth to £364m in the period, as takings at Pretty Little Thing and Boohoo edged up one per cent to £369m.
The group said merging the management teams behind Boohoo and Pretty Little Thing, a brand targeted at women aged between 16 and 35, has delivered “visible benefits in young fashion womenswear”.
Sales at BoohooMan slipped by more than a quarter to £80m but the firm said this brand is declining at a slower rate and delivering better profitability.
‘Breathtaking’ turnaround for Boohoo
Since becoming group chief executive in 2024, Dan Finley has sought to offload non-essential parts of the business in a bid to cut costs.
In recent months, Boohoo has sold a warehouse in Sheffield to fast fashion rival Primark for £90m and offloaded its Nasty Gal brand for £12m. “Together, these transactions materially reduce the Group’s debt, and net debt is expected to be negligible at the year-end.”
Finley said: “The turnaround continues at pace. This is the first time the Group has delivered positive profit before tax since August 2021. I am pleased to report that net debt is expected to be negligible at year-end.
“This is significantly ahead of our original guidance provided at the start of the year. I see material opportunities ahead and we are fully focused on maximising them.”
Analysts at Panmure Liberum said Boohoo’s “pace of change has been breathtaking in the past year”. The broker, which has a ‘buy’ recommendation on the stock, said the “dramatic increase” in profitability puts the group on course for a near-£50m pre-tax profit by the end of the decade.
Boohoo accelerated its turnaround in February when it raised £35m from investors to cut debt. The equity raise caused the group’s shares to fall but Finley said it would “deliver value for all shareholders”.
The group has faced pressure from retail tycoon Mike Ashley, whose retail empire Frasers Group had attacked its executive pay deals but failed in an attempt to take control of its board.