A FASHION house endorsed by celebrities such as Megan Fox and Dele Alli has reported losses of £9.1m as group revenue plunged.
Boohoo, an online fashion outlet famous for being backed by big name celebrities, has seen revenue fall by 17% in the six months leading up to August.
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The company’s UK revenue was down by 19%, shares were down 10% on last year and sales were expected to decline by between 12% and 17%.
Boohoo has reported an adjusted pre-tax loss of £9.1m for the last six months. This is in contrast to a profit of £6.2m over the same period last year.
Founded by former market trader Mahmud Kamani in 2006 the fashion start-up reached a value of over £5 billion during its peak years.
Mahmud’s sons Umar, Adam and Samir are famous for their amazing lifestyles, posting pictures on social media from Hollywood parties.
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The Manchester based online retailer has been linked to a string of high profile celebrities over the years involving Khloe Kardahsian, Hayley Bieber, Little Mix, Nicole Scherzinger and Paris Hilton, as well as financial success.
Boohoo bought the famous Debenhams name for £55million, but crucially it did not snap up the stores — leaving thousands facing an uncertain future.
The company has also bought big name brands such as PrettyLittleThing, Nasty Gal, MissPap, Karen Millen and Coast.
In 2017 Boohoo was named as one of several retailers who used suppliers linked to poor working conditions.
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An investigation by Dispatches found poor conditions in clothing factories in Leicester, who supplied Boohoo and other big name outlets.
Dispatches claimed the factory underpaid workers and exposed them to unsafe and unreasonable working conditions.
Workers were punished with strikes, which would lead to dismissal on the third instance.
At the time Boohoo stated all employees, including those with an agency, are paid at least the national minimum wage.
The company also that the use of strikes was not inline with their own policies.
An investigation by Alison Levitt QC found that Boohoo’s monitoring of the factories was “inadequate” and called the failure to assess the risk to workers during the coronavirus pandemic “inexcusable”.
The controversy is said to have wiped around £1 billion off the company’s value.
The company has recently tried to boost profits by charging customers for returns.
Industry analysts have said that Boohoo has struggled to cope with the rise of Chinese company Shein, which was the emerging star of the so called fast-fashion sector in which Boohoo previously thrived.
There is no suggestion today’s figures are linked to the Channel Four documentary which aired in 2017.
Speaking this morning following the release of their latest figures, Chief executive John Lyttle said “Over the first half we have made substantial progress across key projects and initiatives, including the launch of our US distribution centre.
“We have seen significant improvements in sourcing lead times and invested in pricing to reinforce our value credentials.
“We have identified more than £125m of annualised cost savings that support our investment programme.
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“Our confidence in the medium-term prospects for the group remains unchanged as we execute on our key priorities where we see a clear path to improved profitability and getting back to growth.”
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