Boohoo to raise £200m as it eyes up acquisitions
Boohoo is to raise £200m via a share placing as it seeks to build a war chest to fund acquisition opportunities that will arise from the COVID-19 crisis.
The Manchester-based online fast fashion group said the fundraise would be conducted through an accelerated bookbuild, launched immediately after a statement to the Stock Exchange this evening. Zeus Capital and Jefferies International Limited are acting as joint global coordinators and joint bookrunners in connection with the placing.
Boohoo said it already had audited net cash of £240.7m and since its financial year end in February had remained cash generative. Its tight control of its supply chain means it has been able to pivot production to high selling items, such as loungewear, during lockdown and it has emerged as one of the winners from the crisis, increasing sales year on year in April.
With many fashion brands falling by the wayside, the acquisitive group is eyeing opportunities and wants to have the funds to pounce when opportunities to build its group arise. Last year it added the Karen Millen, Coast and Miss Pap brands to its portfolio, transforming the former two from high street chains to online-only offers, plugging them into its "test and repeat" model.
Other brands in its portfolio include the fast-growing PrettyLittleThing brand, established by Boohoo founder Mahmud Kamani's son Umar, and Nasty Gal, a US business it acquired out of bankruptcy.
At the time of announcing its placing, the company also reported that trading during May had remained "robust" however, given the crisis, it has refrained from providing guidance for the next financial year, in line with many other fashion brands.
This latest move suggests Boohoo may have specific acquisition targets in its sights and its statement read: "The Group intends to use the net proceeds of the Placing to take advantage of numerous opportunities that are likely to emerge in the global fashion industry over the coming months. The Group continues to review a number of possible M&A opportunities and will update shareholders as required."
In the year to February 2020, Boohoo's sales soared by 44% to £1.23bn.