Fashion retailer Boohoo struggled in the first six months of the year with a 10 per cent decline in revenue and a 90 per cent fall in profit before tax.
The beleaguered retailer’s gross profits were down 13 per cent in the first six months of the year, compared to 2021, as the firm struggled with consumers cutting back spending due to the cost of living crisis,
This comes as Boohoo’s founder has seen the value of his share in the business cut down to just £60m from a high of £570m in 2020, according to the Evening Standard.
The firm’s market cap dropped below £500m from a high of £5bn in June 2020, with tycoon founder Mahmud Kamani, controlling a 12 per cent stake in the firm, the Standard said from Refinitiv data.
After its profits were cut down, Boohoo said its outlook for the future was bleak, due to the “result of the impact that the macro-economic and consumer backdrop”.
“Our expectation is for a similar rate of revenue declines to persist over the remainder of the financial year if these conditions continue.”
Warning about “inflation-driven costs” the firm anticipates earnings before tax margins to be between 3-5 per cent, instead of the expected 4-7 per cent.
“Performance in the first half was impacted by a more challenging economic backdrop weighing on consumer demand”, said chief executive John Lyttle.
“We have a clear plan in place to improve future profitability and financial performance through self-help via the delivery of key projects, which will stand us in good stead as macro-economic headwinds ease.”
“We remain confident in the long-term outlook”.
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