Boohoo profit soars despite factory conditions row

Fast-fashion brand Boohoo’s first-half profit has risen 51%, despite a storm over pay and working conditions for those making its clothes.

Last week, a evaluation of Boohoo’s provide chain recognized “many failings” after issues have been raised about its suppliers in Leicester.

The on-line retailer stated it was taking steps to make “substantive, long-lasting and meaningful change”.

It additionally raised its prediction for this yr’s revenue.

“Group revenue growth for the year to 28 February 2021 is expected to be 28-32%, up from approximately 25% as previously guided,” it stated in its interim outcomes assertion.

Pre-tax earnings surged to £68.1m within the six months to 31 August, up from £45.2m a yr earlier.

During that point, the corporate made a variety of acquisitions, including Oasis, Warehouse and Pretty Little Thing to its portfolio of manufacturers, which embody the extra upmarket Karen Millen and Coast.

Active buyer numbers within the final 12 months went up by 34% to 17.four million, with an “exceptional increase” throughout lockdown.

Despite the optimistic outlook, Boohoo stated it was “prudent to continue to plan for a period of economic uncertainty in the second half of the financial year, including possible reduced consumer spending”.

“It is also prudent to plan for return rates returning to normal levels,” it added.

Prospects undented

Boohoo commissioned the unbiased evaluation by barrister Alison Levitt after allegations that factory staff had been exploited through the coronavirus lockdown.

Ms Levitt discovered some staff in its provide chain had not at all times been correctly compensated for his or her work and that many weren’t totally conscious of their rights and their obligations.

She stated Boohoo had “capitalised on the commercial opportunities offered by lockdown”, however took no duty for the results for these making the garments they bought.

The evaluation additionally discovered senior administrators at Boohoo knew about “serious issues” over how staff have been handled months earlier than they got here to mild.

Richard Hunter, head of markets at Interactive Investor, stated the “furore” surrounding the corporate’s Leicester provide chain had performed little to hurt its earnings or prospects.

“This will, of course, come at a cost and the possibility of wider investigations cannot be ruled out at the moment. However, any reputational damage caused by the allegations has not filtered through to a very strong set of numbers.”

He added: “For the moment, the stellar growth continues for Boohoo, as does a share price which has fully recouped the declines of July to stand up 31% in the year to date and ahead by 48% over the last year.”

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