Boohoo Group has acquired the online businesses, brands and associated intellectual properties of the collapsed high street retailers Oasis and Warehouse.
Formerly owned by Icelandic bank Kaupthing the business slumped into administration shortly after the COVID-19 lockdown and no buyer was prepared to acquired them as a going concern leading to the permanent closure of all stores and concessions, and the closure of their websites.
However the brands and assets, including stock, were purchased by restructuring firm Hilco, which has sold them to the Manchester-based online fashion group for £5.25m. Before their collapse the two brands turned over £46.8m online. The two chains had previously operated 90 stores and 400 department store concessions.
They join previous Kaupthing-owned brands Karen Millen and Coast in the Boohoo empire, after the group purchased their online businesses last summer and relaunched them last autumn.
The move comes after Boohoo acquired the remaining shares in fast fashion brand PrettyLittleThing, which was founded by Boohoo founder Mahmud Kamani’s son Umar Kamani. Boohoo paid £269.8m for the remaining 34% stake in the fast growing brand.
Shortly before this the group had raised nearly £200m in cash in a share placing which it said would be used for acquisitions noting the COVID crisis would lead to a number of opportunities on which it wanted to capitalise.
In a trading statement Boohoo said of the acquisition: “Oasis and Warehouse are two well-established brands in the UK targeting fashion forward shoppers and are a complementary addition to our portfolio of brands.
“In line with previous acquisitions, the Group will, in the coming months, integrate Oasis and Warehouse onto its platform, allowing both brands to benefit from the Group’s insight, infrastructure, supply chain and operating model.”
Given it manufactures much of its product in the UK Boohoo is known for its ability to flex its product offer and be quick to market. its “test and repeat” modus operandi is to hold little product in its warehouses, test products on its site and quickly restock successful styles, which has proved valuable during the COVID crisis as it had been able to quickly pivot its offer to loungewear and athleisure (along with associated content and marketing) and increase its sales, whereas its rivals were stuck with unsold stock.
In the trading statement the company said it had recorded another strong quarter of growth with revenues up 45% year on year to £367.8m, with strong growth across boohoo, PLT and Nasty Gal. The brands its acquired last year, Karen Millen, Coast and Miss Pap, also traded strongly it said.
Trading in the middle of March through to early April as the COVID-19 crisis took hold was “mixed”, initially with a marked decrease in year-on-year growth. However performance across all of its brands and geographies improved throughout April, with a “robust” performance delivered in May.
Despite the uncertain backdrop, the group delivered a strong gross margin performance, up 60 basis points year on year to 55.6%, thanks to its test and repeat model.
Looking forward the company said it expected to deliver another strong year of profitable growth, ahead of expectations, with revenue growth anticipated to be approximately 25% with an adjusted EBITDA margin of 9.5% to 10%.
“During unprecedented and challenging times, the Group has delivered a very strong trading and operational performance. I am proud of how our colleagues and business partners from around the world have responded to ensure that we can safely bring to our customers the latest fashions, great value, fantastic prices and best in class service.
“Whilst there is a period of uncertainty within the markets in which we operate, the Group is well-positioned to continue making progress towards leading the fashion e-commerce market globally,” said CEO John Lyttle.