Fast-fashion giant Boohoo unscathed by COVID-19 crisis and modern slavery allegations as sales surge in 2020, analysts say

Fast-fashion giant released its annual results. Boohoo
  • Fast-fashion giant Boohoo Plc reported its annual results for fiscal 2021 on Wednesday.
  • Sales were up 41% during the 12 month period ending in February 2021 versus the year before.
  • Analysts say the company has emerged “unscathed” from the pandemic and modern slavery allegations.
  • See more stories on Insider’s business page.

2020 could have been a disastrous year for fast-fashion giant Boohoo. Not only did it have a global pandemic to contend with, but it also became the focus of a modern slavery investigation after a Sunday Times report revealed that workers at a factory making its clothes were paid as little as £3.50 ($4.80) an hour.

Despite this, the company has emerged from 2020 “with its sales performance untarnished,” GlobalData retail analyst Emily Salter said in a note to clients on Wednesday, commenting on Boohoo’s annual results for the year ending February 2021.

Revenue across the group (Boohoo Plc owns PrettyLittleThing, Nasty Gal, and Coast among other brands) jumped 41% in fiscal 2021 from fiscal 2020, from £1.2 million ($1.6 million) to £1.7 ($2.35 million).

In a statement accompanying its earnings release on Wednesday, Boohoo Plc cofounders Carol Kane and Mahmud Kamani said the company made “great progress,” reporting another set of record results for the past year.

As an online-only business, Boohoo was better positioned to capture sales during the pandemic as brick-and-mortar stores temporarily closed and consumers only had the option to shop online. But Salter said that the company benefited from being more “agile” than others, by shifting focus to loungewear and nightwear as sales of its core categories, such as dresses, declined.

Boohoo’s supply chain and business practices were called out in a Sunday Times investigation, which led to UK authorities launching a modern slavery investigation and several of its retail partners dropping the company, may have hit Boohoo’s share price but didn’t make a dent in its sales, Salter said.

Still, it will not be “plain sailing ahead,” she said. The company still has to work to do to woo back investors and “prove its commitment to its actions.”