SHOPPERS flocking back to the high street caused fashion giant Boohoo to shed a tear or two.
The online retailer, which now spans a host of brands including Pretty Little Thing, Dorothy Perkins, Debenhams and Karen Millen, spooked investors by warning annual sales could dip by as much as 17 per cent.
Shoppers flocking back to the high street caused fashion giant Boohoo to shed a tear or two
Boohoo had previously said sales could be five per cent lower, as it faced tough comparisons with the online shopping boom during the pandemic.
But customer numbers have fallen by 12 per cent to 17million, reflecting the switch back to offline shopping after Covid.
Boohoo has tried to ward off competition from Chinese rival Shein by cutting prices, but sales are still shrinking.
The Manchester-based business said group sales fell by 17 per cent to £729million in the six months to the end of August.
That caused its pre-tax losses to widen from £14.7million to £26.7million.
Shares in Boohoo sank by another five per cent to 30.2p, valuing it at just £383million.
They were as high as 413p mid-Covid and its 2020 market value swelled to £3.8billion, when the City believed the shift to online shopping would last forever.
CEO John Lyttle told SE: “We are confident we can get back to growth, but it is a tough backdrop.”
The online retailer has opened a warehouse in the US which it hopes will address a slate of shipping delays which have prompted young and impatient customers to opt for rivals offering next-day deliveries.
It has also invested £125million in automating its Sheffield warehouse.
Mr Lyttle said the group now had capacity to cope with £4billion of sales, but that would require Boohoo to double its entire annual sales at a time when they are going backwards.
He said: “Online shopping had been around 25 per cent of the market.
“We got to the dazzling heights of 65 per cent during Covid, and now online is back to 40 per cent of the market. It is still above where we were pre-pandemic.”
Despite sinking sales, Boohoo is still splashing out on star influencers.
Model Elle Macpherson is on board for its Karen Millen brand, while reality TV star Kourtney Kardashian and catwalk queen Naomi Campbell are both with Pretty Little Thing.
Boohoo boss Mr Lyttle also confirmed it would spend £90million this year on marketing.
He said its core base of young shoppers were still feeling the pinch during the cost-of-living crisis as he noted that students were facing more costly “rent, food and drink bills”.
Meanwhile, overall figures for the UK retail industry show that online sales fell by 1.7 per cent in August, while in-store sales rose by 1.3 per cent.
The numbers, from the British Retail Consortium, suggest consumers are opting for shopping centres over clicking online.
CRYPTO TYCOON FACES COURT
THE trial of cryptocurrency billionaire Sam Bankman-Fried kicked off, with potential jurors quizzed on whether they or family members had lost money to digital currency trading.
Mr Bankman-Fried shot to global prominence after launching FTX, a crypto exchange that rocketed to a $20billion valuation.
His elite lifestyle imploded when FTX spectacularly collapsed with $40billion of debts last November.
The scandal has been likened to the fallout from the 2001 Enron scandal and US financier Bernie Madoff’s Ponzi schemes.
Mr Bankman-Fried, 31, faces life in prison, having been charged with fraud and money laundering.
He has pleaded not guilty to seven charges at the New York trial.
RISES OFF THE MENU AT GREGGS
THE boss of Greggs says there are no plans to further hike the prices of sausage rolls and steak bakes this year.
The pledge came as the pastry firm said recent sales had risen by more than a fifth.
Soaring costs of ingredients, staff wages and energy had led to the price of a sausage roll rising 15p to £1.20 in January.
Chief executive Roisin Currie said inflationary pressures were now easing.
But she said while the cost of dairy, vegetable oil and wheat have fallen, compared to big jumps last year, Greggs was still facing rising pork prices as well as higher wage bills.
Ms Currie said news that the living wage could rise to £11 an hour would add extra costs — but it would not deter the firm from hiring more staff.
Greggs has 2,410 stores across the UK and is still targeting reaching 3,000.
Ms Currie also revealed there was a small team exploring an international expansion.