boohoo group can’t build on pandemic gains because online fashion segment is slowing down, says GlobalData – Retail Times

Following today’s release of the boohoo group data for Q1, 2022/23. Emily Salter, senior clothing analyst at GlobalData, a leading data and analytics company, offers her point of view: “Compared to extremely strong comparative indicators, the boohoo group slipped into negative territory with sales falling 40.4 million pounds to 445.7 million pounds. While this was in line with the group’s guidelines and is expected to return to growth in Q2, the results disappointed investors as the stock price fell 13% in early morning trading after it had already been decimated over the past year. The slowdown in growth has been experienced throughout the online fashion segment, with this maritime change being the result of bypassing extremely difficult comparisons and simply the inability to consistently generate double-digit growth; with ASOS, which this morning reduced revenue growth and profit expectations in fiscal 2021/22. Missguided’s recent fall into the administration shows the difficulties facing the online fashion segment — although probably one of the drivers of its decline was success boohoo.com and PrettyLittleThing — with returns being a significant issue, which will continue to strain the group’s profitability unless Zara introduces a fee for some return methods.

“Its international performance continued to reduce the group’s sales, with the United States experiencing the biggest drop of 28.0% because delivery problems due to the lack of a local distribution center meant that many customers turned elsewhere – namely, Shein. The news that the group has signed a contract to lease a distribution center in Pennsylvania, and the start is expected in mid-2023, is positive, but until then the group’s brands will no longer be in the eyes of many consumers, so it will have to use its expertise in social media marketing to increase brand awareness before launching the center.

“Two years after the scandal in Leicester, and the boohoo group has still not recovered, with continuous criticism of its practices – although this has been the most deterrent to investors, not consumers. Earlier in June, the results of a group-funded survey found that bad work practices persisted in its factories in Leicester, with more than half of the workers surveyed earning less than the minimum wage. There is no doubt that the group hoped that the results would give a more positive picture in order to strengthen its damaged reputation, but this shows that significant change in the industry is still needed in terms of transparency and regulation. ”

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