Boohoo revenue and profit decline, announces fund raising plan

In an interim results announcement for the six month period, Boohoo said revenue of 619.8 million pounds, declined by 15 percent reflecting difficult market conditions. The company added that the revenue growth was also impacted by the continued growth of the marketplace with its commission-only revenue model.

Boohoo also announced a proposed conditional fundraise of up to approximately 39.3 million pounds, including placing of new ordinary shares of 0.01 pounds each. The company is also proposing to offer and sell new ordinary shares to institutional investors in the US and intends to carry out a separate retail offer via the BookBuild.

Commenting on the company’s performance and outlook, newly appointed CEO, Dan Finley said in a statement: “I’ve been with the Group for nearly three years, joining as CEO of Debenhams in January 2022 transforming it into a highly profitable, capital light marketplace business. I’m excited at the opportunities I see ahead for the entire group.”

Highlights of Boohoo’s H1 results

The company saw significant growth in Debenhams marketplace with over 170 percent GMV pre returns growth and 10,000 brands on board, while performance in Youth Brands was impacted by the external environment, including weak consumer activity, down 16 percent GMV pre returns.

Gross margin for the period was 50.7 percent, down 270bps. The company’s decision to close the US distribution centre had a negative impact on EBITDA of 120bps in the first half.

Adjusted EBITDA margin was 3.4 percent, down 90bps and adjusted EBITDA was 20.8 million pounds, down 34 percent versus the prior year.

“We continue to see significant growth in Debenhams marketplace and beauty with GMV growth of more than 170 percent and more than 10,000 brands onboarded, already achieving our target for the end of 2024. The group has also reinvigorated and transformed Karen Millen into a digital first, premium global brand which has delivered positive GMV growth in 1H FY25 in a challenging market,” added Finley.

Boohoo undertakes business review to improve performance

Boohoo has undertaken a review to unlock and maximise value for all shareholders, assessing the group's corporate structure. During the period, the company decided to close its US distribution centre to focus on profitability.

“Last month we announced a business review to unlock and maximise shareholder value. I am leading this review and will update shareholders in due course. There have been challenges and we continue to operate within a volatile market,” Finley further said.

Boohoo sets medium term targets

In the second half of FY25, the group expects a higher GMV and a stronger adjusted EBITDA performance, when compared to the first half period, despite further investment into the brands to unlock shareholder value.

In the medium term, Boohoo expects Debenhams to achieve a GMV target of over 1.5 billion pounds pre returns with double digit EBITDA margin, Youth Brands to reach 1.8 billion pounds in GMV pre returns, with 6 to 8 percent EBITDA margin target and Karen Millen to achieve double digit EBITDA margin target.

The company’s board believes that the group remains fundamentally undervalued following the developments of recent years, which have created a business with five core brands underpinned by best-in-class infrastructure, addressing a diverse global customer base. The group also continues to review options for its non-core, non-strategic assets, including the Soho Property.