RE: Boohoo - A World Class Growth Business13 Oct 2020 02:46
BOO brands target 16-40 year old “fashion-conscious” consumers
BOO has 9 brands that are differentiated by message, appeal, price-point, and target age-group
Women’s wear options in a variety of styles and sizes
BOO designs, sources, markets and sells its products
Sales are made directly to consumers via brand websites
Major marketing focus on social media and the use of social media “influencers” to increase sales and brand awareness
BOO is a capital light business, as manufacturing is outsourced.
BOO brands have reasonably priced clothing, making it accessible to a wide customer base
BOO brands, especially boohoo, Nasty Gal, and PrettyLittleThing have brand recognition and following
Customer base resilient to economic changes, giving BOO cushioning from economic cycles
BOO brands operate exclusively online, while many of their competitors had physical storefronts in addition to online retail
Boo made investments in their website and warehouse extensions, as well as developed apps
Major acquisitions of US Brand Nasty Gal and 66% of PrettyLittleThing in 2017, which now combine for about 50% of BOO revenue
In 2019 and 2020 acquired five new brands: MissPap, Karen Millen, Coast, Oasis, Warehouse and the remaining 34% of PrettyLittleThing
Increased market share and portfolio diversification with these brand acquisitions
Boohoo makes great Investments
BOO sees the importance of social media in marketing, so they invested using influencers as brand reps, which increases brand awareness and sales
Investment in BOO websites and apps has aligned with the shift from in person shopping to online & increased their sales
Warehouse investments have also proven themselves, as they have allowed BOO to keep pace with customer demand
BOO’s target market is more focused on new fashion items than their impact on the environment
BOO’s main type of customer is resilient to economic cycles and will continuously and somewhat regularly make purchases from their brands
BOO brands appeal to a wide range of people outside of their target audience for more sporadic purchases
BOO knows how to market to its most profitable type of customer by using social media and social media influencers to showcase their offerings
BOO launched BoohooMan and can continue to expand into the men’s wear market
BOO has better margins than competitors and a large customer base that will continue to grow their revenue
BOO is excellent at buying brands cheap out of administration, integrating them successfully and making them profitable within two years.
BOO keeps each brand separate with their own design and management teams, so there is no overlapping
BOO is looking to buy more brands in Europe and USA. BOO have plenty of cash to buy more brands.