Boohoo losses swelled to almost £160m as it encountered “difficult market conditions” caused by high levels of inflation and weakened consumer demand.
Sales were down 17% to £1.46bn in the year to February 29, which it said reflected its increased focus on profitability alongside the challenging market conditions. Revenue was also impacted by the growth of its commission-only marketplace model.
The online retail group noted the “positive trend” in the performance of its five core brands – Boohoo, BoohooMan, PrettyLittleThing, Karen Millen and the Debenhams marketplace – where it said the sales decline had slowed from 9% in the first half, to 4% in the second.
It highlighted the “strong growth” in the Debenhams marketplace, and heralded its “capital-light, stockless model” for driving high margin growth. To improve profitability in its non-core labels it has been transitioning them to the Debenhams marketplace, which it said was starting to bear fruit.
The group said it “took significant steps to reposition the group for sustainable, profitable growth” over the last year and is now targetting gross merchandise value growth as well as margin improvement.
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It remains confident in its medium term 6% to 8% EBITDA margin target.
Boohoo invested £64.8m capital expenditure in its infrastructure for future growth, including its Sheffield warehouse automation project, which will help it deliver £125m in cost savings in the year ahead. However, it expects a significant reduction in Capex in the year ahead as its investment cycle is now complete.
Boohoo CEO John Lyttle said: “The group is now well positioned to return to growth, and we are focused on ensuring that growth is both sustainable and profitable.”
Last month, the online retail group expanded its use of search and merchandising tools provided by cloud-based ecommerce experience platform Bloomreach.
The fashion group, which already used Bloomreach for omnichannel marketing automation, expanded its partnership by implementing AI-powered search and merchandising across its multiple brands.
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