Boohoo now worth more than Marks & Spencer after bumper Christmas
Online fashion group Boohoo (BOO.L) has overtaken the value of high street stalwart Marks & Spencer (MKS.L), yet another sign of the symbolic changing of the guard in retail.
Shares in Boohoo rose 5% on Tuesday after the company said it didn’t suffer a Christmas slowdown experienced by rivals and upgraded sales forecasts.
The share price rise means Boohoo was worth just shy of £3.9bn by Tuesday lunchtime. Marks & Spencer, meanwhile, was valued at £3.7bn. The British favourite lost 10% of its value last week after reporting disappointing Christmas sales performance.
Boohoo’s rise and Marks & Spencer’s fall highlights the seismic changes in retail over the last two decades.
Marks & Spencer, founded in 1884, is one of Britain’s most iconic retailers but has struggled to adapt to changing tastes and shopping habits over the last decade.
Boohoo, meanwhile, was only founded in 2006 but has ridden a wave of online shopping and fast fashion that has propelled it into becoming one of the fastest-growing British companies on the stock market.
Boohoo said Tuesday sales jumped 44% in the four months to 31 December, rising to £473.7m ($614m). Revenue rose across all brands and geographies.
Boohoo targets millennials and Gen Z shoppers under its Boohoo, Nasty Gal, and PrettyLittleThing brands, and last year acquired Karen Millen and Coast as part of a push to target an older market.
“I am delighted to report the group has enjoyed record trading in the last four months of 2019,” chief executive John Lyttle said in a statement. “All of our brands have performed exceptionally well and delivered strong market share gains.”
Sales rose by 44% in the 10 months to 31 December and Boohoo said full-year sales growth was now expected to be between 40% and 42%. Investors had previously been told to expect growth of 33% to 38%. The retailer said earnings margins could also come in slightly better than expected.
“This is another excellent trading quarter for the company,” Greg Lawless and Clive Black, retail analysts at Shore Capital, wrote in an investment note Tuesday morning.
“All the brands continue to develop at pace. The Group’s marketing campaigns continue to clearly resonate with young customers as they fully utilise social media and other mediums.”
Boohoo’s strong Christmas performance stands in contrast to challenges faced by other retailers over the crucial festive period. Superdry (SDRY.L) and Joules (JOUL.L) both issued profit warnings last week and department store John Lewis said it may have to cut staff bonuses for the first time since 1953 after poor Christmas trading.