Sales and profits continue to rise at online fast fashion retailer Boohoo (BOO.L), despite the recent scandal over working conditions in its supply chain.
Boohoo on Wednesday said sales rose by 45% to £816.5m ($1.04bn) in the six months to 31 August. Pre-tax profit jumped by 51% to £68.1m.
The company raised its guidance for full-year sales growth, saying it now expects revenue to grow by between 28% and 32% for the full-year. Earnings forecasts were also upgraded.
Shares in Boohoo slipped half a percent in early trade but had rallied strongly in the days prior to the results.
“The resilience of our business model and the commitment and flexibility of our colleagues and partners has enabled us to continue to operate our business successfully,” said John Lyttle, Boohoo’s CEO.
“We are grateful to all and pleased to be able to report a strong performance with continued high growth rates in revenue and strong profitability.”
The rise in sales and profits comes despite a recent scandal over working conditions in Boohoo’s supply chain. The Guardian and the Sunday Times exposed poor working conditions and low pay in Leicester factories supplying Boohoo in July.
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An independent review, which reported last week, concluded their were “many failings” in the way Boohoo managed its supply chain but said: “Boohoo did not deliberately allow poor conditions and low pay to exist within its supply chain, it did not intentionally profit from them and its business model is not founded on exploiting workers in Leicester.”
Lyttle on Wednesday said the company had “established a programme to implement the recommendations of the report to make substantive, long-lasting and meaningful change that all stakeholders in the boohoo group will benefit from.”
Greg Lawless and Clive Black, retail analysts at Shore Capital, said Boohoo’s results showed there had been “no fallout from consumers on the work practices exposé in Leicester.”
However, they said Boohoo “remains under a cloud” and will face rising costs as it looks to reform its supply chain in Leicester, which accounts for around 40% of revenues.
As well as the Boohoo brand, the company also owns other retailers such as PrettyLittleThing, Karen Millen, Oasis, Warehouse, Coast, and MissPap.
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