Boohoo pays 5.25 million pounds for Oasis and Warehouse online businesses

New York – British online fashion retailer Boohoo Plc. has announced it agreed to pay 5.25 million pounds to take over the online businesses of the Oasis and Warehouse chains.

Boohoo said Oasis and Warehouse would be integrated into its online platform. The brands generated 47 million pounds in revenues in the year to the end of February. Both in the hands of administrators, Oasis and Warehouse saw their respective brand and stock bought by Hilco Capital, and now sold to Boohoo.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said Boohoo's own latest purchases would need refreshing: "It's up to Boohoo to rejuvenate [Oasis and Warehouse] and hope they resonate well with its traditionally younger, more fashion-forward customer base. "It's a similar move to the Karen Millen and Coast acquisitions, but while we've heard trading's going well with these additions, we haven't had any numbers to crunch, so it's hard to say what the big picture looks like," she said, as reported by the BBC.

Boohoo has been able to leverage the rising demand for online clothing

“Boohoo continues to defy the doubters,” said to the ‘Telegraph’ Russ Mould, the investment director at AJ Bell. “Any scepticism over demand for its clothes in lockdown, on the premise that its targeted demographic no longer needs to dress up to go out, looks unfounded after a stunning surge in sales. He also pointed out that “Given the scale of the coronavirus crisis, consumers’ willingness to spend has been impressively resilient. The question for Boohoo is whether this can continue when the full economic fallout feeds through.”

It’s worth recalling that in May, Boohoo raised 198 million pounds from investors to take advantage of acquisition opportunities as retail businesses struggle to recover from the pandemic.

Last month Boohoo bought out a minority stake in Pretty Little Thing. It paid an initial 270 million pounds, potentially rising to 324 million pounds for a 34 percent stake in PLT, which is part-owned by Umar Kamani, the son of Boohoo’s chairman and co-founder, Mahmud Kamani.

The e-tailer said in a financial update Wednesday that trading had initially been mixed as the UK went into lockdown. Sales from the middle of March into early April fell as a result of the initial impact of the pandemic. However, trade since then has been strong, with Boohoo’s sales surging by 45 percent in the quarter to the end of May as consumers turned to online shopping during the coronavirus lockdown.

“During unprecedented and challenging times the group has delivered a very strong trading and operational performance,” said John Lyttle, Boohoo’s group chief executive. “While there is a period of uncertainty within the markets in which we operate, the group is well positioned to continue making progress towards leading the fashion e-commerce market globally.”

On the wake of the news, Boohoo’s shares jumped to 425 pence earlier today, what means a 9 percent bounce since the close at 157 pence apiece in mid-March. Currently, the fashion group is valued at 5.3 billion pounds.

Photo credits: Oasis official website, UK