RE: Financials.7 Apr 2020 11:25
he markets can be ruthless sometimes. Over the weekend, a report in The Guardian took aim at Boohoo and other online fashion retailers. The gist of the story was that workers at Boohoo and Pretty Little Thing, its sister brand, were unhappy at having to work in warehouses amid the virus outbreak.
The workers quoted in the article claimed that bosses were putting profits ahead of their safety as it was “practically impossible” to keep the recommended two metres apart and still hit their hourly targets.
Both companies have rejected the allegations of safety breaches but if Boohoo’s bosses had worried that the negative publicity would dent the value of the shares come yesterday morning they certainly shouldn’t have been.
Instead, shares in Boohoo jumped 23p, or 12.8 per cent, to 203p while those of its rival, Asos, climbed 104p, or 9.8 per cent, to £11.64.
Investors focused on the order numbers instead, with one warehouse worker estimating that the site had processed 400,000 orders last week, compared with 120,000 in a “normal” week.
The surge in orders comes as Boohoo and its peers have begun huge sales designed to get people spending while they are at home.
Analysts at Peel Hunt said that such numbers would be “surprising” and would challenge their estimates of a 25 per cent plunge in sales at Boohoo and Asos during this quarter.
“With competitors such as New Look and Arcadia likely to be looking at accelerated store closures and declines, we continue to see the share price declines at Asos and Boohoo as a buying opportunity,” they added.
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