Peter Williams, Chairman of the boohoo Group LON:BOO, commented: “PrettyLittleThing was always going to be a natural fit with boohoo. Umar and his team are to be congratulated for creating a fantastic brand, which complements boohoo’s own inclusive and innovative brand, and we are delighted to add this fast growing, international business to the Group. We believe this is an excellent opportunity to extend the Group’s overall customer appeal through two distinct, complementary brands while further enhancing the Group’s strong growth trajectory. We look forward to building on PrettyLittleThing’s success and we welcome Umar and his team to the Group.”
boohoo.com plc LON:BOO the leading online fashion retailer, has continued to perform well since reporting its Interim Results on 27 September 2016. Trading was strong across the Black Friday weekend and peak season trading continues to be encouraging. Reflecting this strong trading performance, the Board now expects boohoo.comto deliver revenue growth of between 38% and 42% in FY 17, against previous guidance of between 30% and 35%. boohoo continues to benefit from improved operating leverage in the business, and the Board anticipates boohoo delivering an EBITDA margin of between 11% and 12% in FY 17, against previous guidance of around 11%. In addition, the boohoo Group will benefit from the acquisition of 21 Three Clothing Company Ltd (“PrettyLittleThing”, “PLT” or “the Company”), which is expected to be consolidated from 3 January 2017.
Acquisition of PrettyLittleThing
The boohoo Group today announces the acquisition of 66% of PrettyLittleThing for a cash consideration of £3.3 million. The transaction is expected to complement the Group’s presence both in the UK and internationally.
Transaction Highlights:
· The boohoo Group will acquire 66% of the issued share capital of PLT for a cash consideration of £3.3m1. This is pro rata to the March 2014 option agreement to acquire 100% for £5.0m
· The remaining 34% will be used to incentivise CEO Umar Kamani and PLT’s senior management who have overseen exceptional revenue growth since 2014
· PLT revenue2 grew by over 400% to £17.0m in the financial year ended 29 February 2016 (FY 15: £3.1m), and the Company delivered revenue of £19.0m in the six months to 31 August 2016 (H1 16: £6.4m)
· PLT is expected to achieve revenue growth in excess of 150% in the financial year ending 28 February 2017 (“FY 17”), while being broadly breakeven at EBITDA level. In FY 18, the Group plans to review and invest in PLT’s operations, including its warehousing, to ensure the Company is well positioned for the future. Accordingly, PLT’s revenue is expected to grow at a similar rate to boohoo’s in FY 18
· The 34% retained by PLT management will be subject to the management team remaining with PLT over the five-year period to 28 February 2022, and achieving demanding revenue and EBITDA targets
· At 28 February 2022, the boohoo Group will have the option to acquire this remaining 34% at market value3
· The transaction is on a cash free, debt free basis and will be financed through the Group’s existing cash resources
Umar Kamani, CEO of PrettyLittleThing commented: “PrettyLittleThing has been a great success story over the last couple of years. Our youthful management team enables us to engage directly with our target market, pushing the boundaries of innovation in the celebrity led world of fast fashion. As part of the boohoo Group, we will continue to build on our strong brand positioning and we are excited by the prospect of continuing to anticipate and set trends.”
