LONDON — Boohoo Group is on an acquisitions roll, picking up the online platforms of British fast-fashion retailers Oasis and Warehouse just months after they collapsed into administration.
Boohoo said Wednesday during a first-quarter trading update that it has purchased the online operations and all associated intellectual property of Oasis and Warehouse for 5.25 million pounds in cash from Hilco Capital Ltd.
As reported, the Oasis and Warehouse chains declared bankruptcy in April in the midst of Britain’s coronavirus lockdown, and a few weeks later Hilco Capital purchased “certain stock and intellectual property assets,” from the ailing fashion retailers.
Deloitte, which had handled the administration process, said the retailers could not be rescued as a going concern, so they shut 92 stores and hundreds of concessions for good, with nearly 2,000 jobs lost.
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Boohoo said that, in line with previous acquisitions, it will integrate Oasis and Warehouse onto its platform, “allowing both brands to benefit from the group’s insight, infrastructure, supply chain and operating model.”
For the most recent financial year ending Feb. 29, 2020, unaudited management information shows that Oasis and Warehouse generated direct online revenues of 46.8 million pounds in aggregate, Boohoo said.
Those two brands had been put up for sale by parent company Kaupthing, an Icelandic bank, and while ailing, had not declared bankruptcy.
All four brands — Oasis, Warehouse, Karen Millen and Coast — once populated high streets up and down Britain, selling women’s fashion and accessories inspired by the designer runways, but sold at mostly contemporary price points.
At one stage, a decade ago, all four brands were grouped under the Aurora Fashions umbrella, whose ultimate owner was Iceland’s now defunct Kaupthing Bank.
Those brands and other British high-street chains, such as the ailing French Connection, have come under intense pressure from fast-fashion players including Zara, H&M and Primark, and from indie contemporary brands with fresher, more interesting designs.
Indeed, the high street’s loss is proving to be Boohoo’s gain, with the online retail platform getting stronger by the month.
On Wednesday, Boohoo Group revealed that revenues in the first quarter ended May 31 totaled 367.8 million pounds, up 45 percent year-on-year, with strong underlying growth across Boohoo, Pretty Little Thing and Nasty Gal.
Boohoo said its newest brands, MissPap, Karen Millen and Coast, continue to trade strongly, having successfully integrated onto the group’s scalable platform last year.
After witnessing uneven trading in March, Boohoo said performance across all of its brands and geographies improved throughout April, with a “robust” performance delivered in May.
John Lyttle, Boohoo Group’s chief executive officer, said that while there may still be uncertainty within the markets, “the group is well positioned to continue making progress towards leading the fashion e-commerce market globally.”
As reported in late May, Boohoo Group completed the purchase of the 34 percent minority interest it did not previously own in the online fast-fashion brand PrettyLittleThing.
Boohoo said Wednesday that it continues to expect PLT to be “significantly earnings enhancing,” with the acquisition representing “an important further step toward achieving our vision to lead the fashion e-commerce market globally.”
Earlier this year, the Boohoo Group raised gross proceeds of 197.7 million pounds from shareholders through a placing so that it could “take advantage of numerous M&A opportunities that are likely to emerge in the global fashion industry over the coming months.”
The group said Wednesday that it continues to appraise opportunities and will update shareholders in due course. It finished the quarter with in excess of 350 million pounds of net cash on its balance sheet.
In a flash note following the results, analysts from Royal Bank of Canada said the revenue results beat expectations. It also noted that Boohoo’s positive cash flow generation and flexible supply chain position the company “defensively in the challenging backdrop,” but there is still work to be done at the company.
“We believe further investment is required to enhance Boohoo’s service proposition, which lags peers, particularly internationally,” the bank said.
Shares in Boohoo surged 7.2 percent to 4.18 pounds on the London Stock Exchange on Wednesday following the results and acquisition announcement.