WHEN CAROL KANE co-founded Boohoo, an online fast-fashion firm, with Mahmud Kamani in 2006, “it was just me, Mahmud, a photographer and the model was Umar’s girlfriend at the time,” she says. Umar is a son of Mahmud, who later co-founded another successful web-based label, PrettyLittleThing, and sold most of it to Boohoo. The Manchester-based group has come a long way fast.
Its annual sales have reached £857m ($1.1bn) and it is the highest-valued firm on AIM, the London Stock Exchange’s junior bourse. It has yet to achieve the scale of a Primark or H&M, but it is becoming hard to ignore. On August 6th Boohoo bought the brands Karen Millen and Coast. Disregarding lamentations about the demise of the high street, it said it would swiftly shut their 200-odd physical outlets.
The company’s headquarters in Manchester, meanwhile, is part building site owing to its expansion. For a fashion firm the reception area is unusually cluttered, and even grimy. Above it are floor upon floor of racks of clothes next to designers, hair-and-make-up artists with models in studios churning out looks for the websites. Speed is of the essence. Boohoo can design, manufacture and send out tiny batches—300 pieces—of a particular design in two weeks, so it is extremely responsive to its customers. That compares with around six weeks at Inditex, owner of Zara, a Spanish giant whose trajectory Boohoo would like to match.
In addition to speed, two further ideas are helping Boohoo disrupt fast fashion. It was the first to use social-media influencers on an industrial scale—it has a network in the tens of thousands. Keeping up with all the new ones can be hard, says Ms Kane. “Love Island”, a reality-TV show featuring dozens of comely people locked in a villa and encouraged to couple up, is a reliable source. Not that celebrity looks are required to wear clothes from Boohoo or Nasty Gal, another of its brands. The group’s second innovation was to embrace the “body-positivity” movement and make high fashion available in very large sizes, beyond UK-size 20 (US-size 16).
With a market value of £2.6bn and plenty of cash, Boohoo wants to build on its expansion into America and Europe and strike more deals. In March Mr Kamani and Ms Kane brought in a new chief executive, John Lyttle, a former chief operating officer of Primark. The stockmarket is watching to see if Boohoo can keep up its growth and maintain high profitability.
The firm is paying only so much attention to how big companies are meant to behave. Mr Kamani, who with Ms Kane is its entrepreneurial force (he owns 16.1%), is still in charge. As part of the shuffle he was made executive chairman, prompting Boohoo’s non-executive chairman, a retail veteran, to leave. “It is not conventional corporate governance,” says Richard Watts at Merian Global Investors, which owns 14.8% of Boohoo and which backed the change. “But Mr Kamani has been critical to the success of the firm.”
Some of Boohoo’s operations may require new thinking. In January a committee of MPs named it, with Amazon and JD Sports, as “least engaged” with two problems of fast fashion. These are the use of illegally cheap labour, and waste from people wearing cheap clothes once or twice and then binning them. Boohoo was not accused of underpaying any workers. But it is a big contractor in Leicester, where, says a 2015 report by the city’s university, most garment workers earn below the minimum wage. Ms Kane says she is proud of manufacturing in Britain, and the firm ensures its suppliers use electronic payrolls rather than cash, so pay is easier to audit.
Boohoo’s feistiness suits its customers (who did not boycott it after media coverage of rag-trade work conditions). The tagline to a selection of Boohoo clothes picked out by Zendaya, an American actress, on the wall in Manchester sums it up: “When you’re being yelled at and you’re waiting for them to finish so you can hit them with facts.” Boohoo’s facts are millions of young customers and runaway growth, a combo that seldom goes out of style. ■