Boohoo SWOT and PESTLE Analysis

Strength

1. Robust growth in the company’s financial performance: With the entire fashion and retail industry sales turnover getting hit severely by the Covid–19 pandemic, Boohoo has remained unperturbed and showed significant results for FY2020 in line with similar trajectory the company has been following since inception. Announcing the results for the financial year ended 29 February 2020, the company performed outstandingly with a 44% increase in the revenues accounting to £1.235 billion, across the group, with exceptional growth across all operating geographies with 39% increase in the UK and international turnover up by 51%. Currently, the revenues obtained from the international segment attributes to 45% of total as compared to 43% in 2019. In terms of the company’s performance of its allied brands, Boohoo’s revenue saw an increase of 38% to £600.7 million and down 30bps, upon 52.6% gross margin. Furthermore, the brands PrettyLittleThing and Nasty Gal projected revenue increase of 38% and 106%, to hit £516.3 million and £98.8 million on a gross margin of 55.6% and 54.2%, down 100bps and 250bps respectively.

2. Highly effective and automated distribution centres: Boohoo attributed a significant chunk of its expenses towards the development of efficient distribution centres, with the goal of creating a £3 billion-net global sales-generating distribution network. The extension for Burnley distribution centre was built with the automation going live in April 2019, intended to pick-up the efficiency along with reducing costs greatly for the upcoming financial year 2020 & beyond. In addition to this, the company provided bus service for all nearby towns to the distribution centre as well as new welfare facilities for the Burnley employees. Also, the relocation of PrettyLittleThing’s distribution centre was completed successfully, with an expenditure of £6.7 million and minimal operational disruptions. Alongside, Boohoo increased its sales capacity, underpinned the brand’s infrastructural needs and added to the Group’s operational flexibility, by adding the Sheffield facility.

3. Successful in implementing “fashion-for-all" approach: Even though the highly established, famous street fashion names like Topshop, New Look and Monsoon are retreating into near oblivion, Boohoo has been projecting significant surges in all the financial parameters. For the fiscal year 2019 and 2020, the company projected annual revenue growths of 48% and 44% respectively. A major reason for this significant growth can be attributed to the “fashion-for-all" approach that Boohoo adopted by embracing plus-sized models. This online fashion group started the sales of 26-sized, latest bodycon dresses, miniskirts and swimsuits, post which the sales numbers sky-rocketed. According to the co-founder of the group, Carol Kane, the company’s “fashion for all” approach implemented using the “PrettyLittleThing” brand, fuelled this growth. By adopting diversity, the company has reached out to the young online shoppers, who resort to social media influencers instead of Vogue and Grazia.

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Weakness

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Opportunity

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Threats

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Adoption of 100% recyclable parcel bags made from recycled material: With the rising awareness amongst the consumers regarding the importance of fashion sustainability, all the responsible corporations in the fashion and retail industry are moving towards the adoption of a circular economy. Boohoo has also been taking actions in this direction and has been monitoring and reporting all its wastage, along with diverting landfill wastes from its warehouses. The company has been involved in the recycling of paper and plastic wastes from the warehouses and sites. Moreover, to reduce its environmental footprints, this online fashion group has planned to introduce a collection of sustainable fibres, like recycled polyester using plastic bottles. Boohoo has ensured that all of its dispatch bags are made from 100% recycled film, by using a closed-loop recycling system that includes reprocessing bags that can be recycled at homes after removing the barcode label. Also, in 2019, Boohoo launched a collection having 34 garment pieces including co-ord sets, going out dresses, bodysuits, flares and crop tops that are made from 95% recycled polyester and 5% elastin.

2. Increasing the sustainability quotient of products: In order to incorporate sustainability in the business processes, responsible companies across the globe are aligning themselves with internationally recognized initiatives like the Sustainable Apparel Coalition (SAC) and Sustainable Clothing Action Plan (SCAP). In order to increase its products’ sustainability quotient, Boohoo has recently registered to be a part of WRAP’s Sustainable Clothing Action Plan. The company is working towards learning from WRAP on how to reduce environmental footprints by reduction of carbon, waste, and water content in the garments as well as mapping and reducing the impacts of the different fibres used to make clothes by recycling or using environment-friendly fibres like cotton obtained from sustainable sources. In addition, Boohoo has planned to launch a consumer awareness programme to encourage its consumers for low temperature washing and tumble drying avoiding. Also, the company plans to promote its longstanding agreement with reGAIN, and encourage returning of used garments for recycling amongst its consumers.