Online fashion retailer Boohoo said it was investigating some suppliers for poor working conditions and low pay
* Shares down 2.5%
* Caution lingers over supply chain issues - Liberum (Adds analyst, shares, background)
Jan 14 (Reuters) - Online fashion retailer Boohoo, working to rebuild its image following a row over low pay and working conditions in its supply chain, raised its annual revenue target on Thursday after a strong Christmas season.
While more conventional retailers have struggled with a collapse in footfall over the past year, the coronavirus crisis has only added to the gains made by Boohoo and other e-commerce players.
The company reported revenue growth of 42% for the 10 months to the end of December and raised its growth forecast for the year ending in February to 36-38% from 28-32%.
“Growth has been strong across our multi-brand platform and we have continued to grow our market share across all geographies,” Chief Executive John Lyttle said.
But with analysts pointing to continuing concerns over Boohoo’s supply chain and reputational issues, shares in the group, which have rebounded in recent months but lagged online rival ASOS, fell 2.5% after the trading update.
Launched in 2006 by billionaire Mahmud Kamani and businesswoman Carol Kane, Boohoo targets millennials and others happy to shop on their phones rather than in store.
Boohoo said it was investigating some suppliers following an independent review last year that found failings in its supply chain related to working conditions and low pay, and has banned 64 of them so far.
It said it was identifying alternative “ethical” partners.
“The share price resurgence suggests that investors have put the supply chain issues behind them, and growth suggests no impact from any consumer activism,” Liberum analysts said in a note.
“While this suggests a ‘buy’, we remain on the side of caution given the scale of the ESG (environmental, social and governance) challenges facing the group, the possibility of follow-up investigations and potential financial impact from an ethical supply chain.”
(Reporting by Muvija M in Bengaluru; Editing by Patrick Graham, Saumyadeb Chakrabarty, Subhranshu Sahu and Jan Harvey)