Cash-rich Boohoo mulls buying ailing fashion brands
While the coronavirus crisis is proving devastating for some fashion companies, others such as Boohoo are thriving and the online retail giant could see acquisition opportunities as some brands struggle to survive.
Following the release of a stellar set of results this week, the company has said that it could buy up brands in trouble. The company already has a history of doing this with acquisitions such as Nasty Gal and Karen Millen/Coast.
There has even been speculation that it could acquire the Oasis and Warehouse chains that collapsed into administration this month and that used to be part of the same company as Karen Millen and Coast. However, it hasn't commented on any intentions it may have in this direction.
The company’s balance sheet is healthy and it had around £241 million in cash at its year-end.
Finance chief Neil Catto said the firm’s priority at the moment has been the wellbeing of its teams and coping with the crisis. But he added that the balance sheet is strong and it has the ability to look at opportunities "to help other brands through the crisis". He expects "many opportunities" in the weeks ahead and said the firm will be looking at them.
Co-founder Carol Kane also said lockdown shoppers are buying more athleisure, with hoodies, joggers and loungewear selling well. She added that the firm has short lead times and this has helped it shift its focus to in-demand categories. She said fabric that might have gone into one garment has been switched to another. Essentially, what might have been made into a bodycon dress can now go into loungewear coordinates.
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