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Boohoo now 'bigger than M&S' as sales just won't slow down

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today Jan 15, 2020
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News this week that Boohoo had a very good final few months of 2019 was significant for more than one reason. As well as showing the firm’s overall strength, it sent its share price — and its overall value — soaring.


Karen Millen



Importantly too, it saw the company hitting something of a milestone with its stock market value of £3.93 billion accelerating well above that of UK high street stalwart M&S at £3.58 billion. Incidentally, Boohoo is also much, much bigger than its more comparable pureplay e-tail peer Asos, which is worth £2.78 billion.

The different values of Boohoo and M&S in particular are a neat illustration of just how retail has changed in the 21st century. The decline of the venerable multi-category retailer that stayed focused on its sprawling store estate for much too long is a story that’s a complete contrast to that of the nimble, pureplay, value-focused specialist.

Fourteen-year-old Boohoo’s share price climbed around 5% on Tuesday after its Christmas trading update was released and perhaps it would have risen more, had it not already been up 70% over the past year.

That happened at the same time as Moody’s credit ratings agency said it was mulling a cut to 136-year-old M&S’s investment rating to ‘junk’. That news drove it shares down 2% (again, they might have fallen more had they not already seen a steady decline in the past year), sending its market capitalisation down too.

And analysts think that Boohoo can continue to grow for the foreseeable future. Calling it the “darling of UK retail”, GlobalData’s Emily Salter said it’s “still able to attract more shoppers and greater spend from existing customers, by promoting its low prices and niche sizing collections”.

But that said, she still sounded a warning note. CEO John Lyttle had said the firm’s new acquisitions, especially Karen Millen and Coast, give the group access to significantly different target customers. But Salter added that the company “must be careful to retain [the brands’] premium images, which are at risk given these brands have already started to offer frequent 25%-off promotions. Although steep discounts have come to be expected from young fast fashion brands, boohoo.com and PrettyLittleThing, it should not be the case with more premium brands where higher price points signify quality and unique design handwriting”.

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