Boohoo.com: ugly duckling or beautiful swan?
Boohoo claims to be one of the UKs leading online fashion retailers, offering trend-led clothing at affordable prices. With the Manchester based Group looking to IPO in the first quarter of 2014 we wanted to take a closer look at their offering. Rather than adopt a traditional City research approach and seek the views of a middle aged male analyst with little dress sense and little real interest in the product, we sought out the opinion of a typical Boohoo customer who has kindly offered her thoughts here:
Some businesses are like the story of the ugly duckling. They begin by appearing unattractive and no-one wants to be seen or associated with them. They show little potential on the outside but on the inside there is some real excitement lurking! In Boohoo’s case, this young customer believes it has all the makings of a great business, but its biggest let-down is sadly its advertising and website design. My first impression of the website was that it was quite tacky and cheap, having a black background with a pink font just doesn’t work if the target audience is both men and women. However, when I explored the web site a bit more I discovered the prices are really attractive and significantly cheaper than ASOS (a similar clothes website). For example the dresses sold on ASOS range from £5-£470 but from only £6-£60 on Boohoo. This encourages a larger clothes purchase to be made at one time, so we find our baskets can be fuller and more exciting to those on a different site like ASOS. Although in defence of ASOS Boohoo’s discounts fall short with a 10% student discount compared with the impressive 20% offered by ASOS.
After making a sizeable purchase with little expectation, I was really impressed by the quality of the clothes when they arrived and the excellent service. While it was easy to return the items I found myself keeping most of my order.
Overall my main disappointment with Boohoo was the fact that it first misled me into believing it was tacky and cheap but in reality I had a very easy, enjoyable and ultimately successful shopping experience.
In these early stages of its life (it started in 2006) I cannot tell whether Boohoo will grow into a beautiful swan, but it seems to have lots of potential and I love my new clothes!
Views of one young (trendy) customer
Despite the lofty market cap of more than £500m that is being suggested for this small business which had sales of only £96m in the year ending Feb 2013 and the stiff competition from high flyer ASOS (Sales of £769m in 2013) we think Boohoo might be onto something and is definitely worth a close look!
This entry was filed under Boohoo.com plc.