Boohoo, the ever-so-hip online fashion retailer, got a booboo today when it revealed pre-Christmas sales growth was significantly below expectations. Shares fell 41.8% to 22.2p by mid-morning after the firm made the unexpected announcement to the stock market. O.M.G.
The reason for the commotion is that sales increased only 25% over the four months to December 31st, to £50.8m. That might not sound so bad, but the market had expected something much juicier, following Boohoo's big marketing push over the period.
Boohoo blames the warm autumn, which it says caused 'heavy promotional activity' from high street rivals. It's, like, so unfair, high street stores undercutting their online rivals. Give a stylish modern company a chance, yah?
The retailer did point to a record Black Friday week (big deal - everyone and their dog had a good week), during which its new warehouse system enabled it to handle 2.3 times more business in one day than its previous record.
This doesn't seem to have done Boohoo much good, however. It expects revenue growth for the remaining two months of its financial year to be in line with the last four, i.e. at around 25%.
Given that its first half revenues were up 31% and its last full year revenues were up 62%, its easy to see why investors aren't happy. Stock in the firm has been below its March listing price of 50p for some time, and well below the 85p peak it reached in its first day of feverish trading.
It's not all bad news though - Boohoo's still growing at a rate most retailers would give their favourite pair of shoes for, and it hasn't been afflicted by the seven plagues of ASOS, having managed to weather last year's strong pound (remember that?) and avoid unfortunate warehouse fires.