No Tears at Boohoo Group: Boohoo adds two new additions to its expanding online retail portfolio
July 13, 2020
2 min read
What's going on here?
Online retail giant Boohoo is set to acquire Oasis and Warehouse.
What does this mean?
Boohoo Group raised £198 mn from investors in May in order to take advantage of acquisition opportunities, as retail businesses struggled to recover from the pandemic. Oasis and Warehouse went into administration in April, forced to close their stores as a result of the lockdown. The purchase for £5.25 mn will be Boohoo’s first purchase since raising the money, and shares in Boohoo rose 9% with the news of the announcement. Boohoo reportedly seeks to integrate the brands into their supply model.
Oasis and Warehouse already have strong customer bases, but the cost of serving these customers though physical stores put them under financial pressure. A switch to an online sales platform with Boohoo Group will likely see the brands thrive. Boohoo’s experience with online sales, and their personalised marketing and social media expertise will likely turn around the fortunes of the brands. However, with a change of suppliers, Boohoo may need to prove to loyal customers that they are able to keep the same quality of design and manufacturing.
What's the big picture effect?
The acquisition comes a year after the purchases and success of Karen Millen and Coast by the group. It is now up to Boohoo to rejuvenate Oasis and Warehouse in the same way. While there were initial concerns that online retail would suffer because of the pandemic, as people would not be dressing up to go out the market has proven otherwise, Boohoo has reported a 45% surge in sales as consumers seek athleisure and lounge wear for lockdown. The company’s success could be attributed to their marketing strategy, and flexible supply chain, as it allows for quick turn around and promotion of fashion items. This is something which Oasis and Warehouse will soon benefit from, as they join a growing portfolio held by Boohoo Group, which includes Prettylittlething, NastyGal, Misspap, Karen Millen, and Coast. Boohoo says it expects revenue to grow by 25% in the current financial year after the addition of the two brands.
As Boohoo continues to deliver strong results, some analysts predict that there could be more acquisitions to come. It is understood that the group is considering both distressed and profitable businesses for future acquisitions. The question for Boohoo is whether it can keep up the growth when the economic fallout of the pandemic comes through.
Report written by Julie Lawford
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