by It was the unequivocal symbol of success: a lavish four-day wedding on the Côte d’Azur, a guest list including Naomi Campbell, Rio Ferdinand and Anthony Joshua, performances from Mariah Carey, and Andrea Bocelli serenading the bride with an orchestra complete and she. walked down the aisle. But results posted this week look like a convenient – if expensive – distraction from Boohoo heir Umar Kamani’s £20m extravaganza.
The mega-brand that put fast fashion on the map appears to be in freefall: losses have increased by 76 percent, more than 1,000 jobs have been cut, and shares are worth less than a tenth of their 2020 value.
Mamud Kamani and Carole Kane co-founded Boohoo in 2006. The retailer now owns Pretty Little Thing (created by two of Kamani’s three sons, Umar and Adam), as well as Debenhams, Karen Millen, Coast, Dorothy Perkins and Warehouse. Its current situation is the result of “difficult market conditions, due to high levels of inflation and weak consumer demand”, according to John Lyttle, its chief executive. Lyttle said £125m of cost-cutting measures would follow – including axing staff who spent the weekend watching an exhibition without Kamani splashing out on social media.
Online retailer Boohoo hit its peak in 2020, when the pandemic closed the already ailing high street. That June, it was worth £5.2bn – more than Marks & Spencer and Asos combined – and sales almost doubled. Tube platforms and buses were cloaked in his ads; His clothes, sometimes priced as low as a pound or two, were the uniform of the Love Island star. Meanwhile, the Kamani brothers have been very happy with their success – A-list parties, celebrities including Nicki Minaj, Jessie J and Miley Cyrus wearing their clothes, Umar earning the prestigious title of the -eligible eighth bachelor in Britain, as prescribed by Tatler.
“Boohoo quickly tapped into a movement and a moment,” says Dana Thomas, author of Fashionopolis: The Price of Fast Fashion and the Future of Clothes, and European sustainability editor at British Vogue. “It was a fun little idea” – making clothes immediately in response to trends, at rock-bottom prices – but “like a firework exploding in the air, it’s going to fall to the ground.”
The first signs of trouble began in the summer of 2020 when Sunday timeA report claimed that workers at Boohoo’s Leicester factory were being paid £3.50 an hour (the legal minimum wage for over 25s at the time was £8.72). A later independent review found that the company did not deliberately take advantage of these practices, but highlighted a series of failures and ‘inadequate’ monitoring. Retailers Next, Asos and Zalando dropped Boohoo lines from their sites, and share prices fell.
The company needed damage control. They are set to open a new factory in Leicester in January 2022 – a multi-million pound investment designed to create almost 200 jobs as a sign of their commitment to making quality clothes in Britain. They also introduced an Agenda for Change – an initiative that promises fair prices and timescales to suppliers. But this was “consistently undermined”, according to an undercover BBC reporter who spent 10 weeks at the company as part of the Panorama investigation. The new facility closed at the beginning of this year.
While it might be tempting to see the decline of Boohoo as a sign that Britain is finally breaking up with fast fashion, the dominance of Shein – the Chinese firm worth £100bn at the end of 2022 – looks set to prove otherwise. The State of Fashion 2024 report, published by Business of Fashion and McKinsey, found that 26 percent of UK consumers had shopped at Shein or Temu, an Amazon-esque online retailer, in the past 12 months.
“Shein is a really tough company and relentless in its marketing, scope and production, and I think companies like Boohoo can’t keep up,” says Thomas. “Shein is a machine and Boohoo is a family extravaganza… any time you hear more about the family and their exploits and how they’re living big and all their glam, you know there’s they spend too much time having fun and not. enough time on the company.”
Louise Déglise-Favre, associate retail analyst at GlobalData, agrees that in the case of Boohoo, “there is, in fact, a shift in power rather than an overall slowdown in the fast fashion industry.” This is China’s strong manpower, with Déglise-Favre citing its “manufacturing capabilities and turnaround speed” as key tools in Shein’s arsenal.
Cheap labor costs also help keep prices down; the company uploads 6,000 new garments daily to its website. Add to that celebrity endorsements from the likes of Katy Perry and Rita Ora, who were featured at her Covid 2021 fundraiser, and Khloe Kardashian, and the juggernaut is only growing.
“They’re really good at leveraging social media in a way that other players like Boohoo or even Asos haven’t really done,” says Déglise-Favre. “They really managed to corner TikTok.” This social media power, combined with search engine optimization that sees them (or Temu) at the top every time you type a product name into Google, but further reinforces its ubiquity. “They have such hyper-visibility that it’s almost impossible to avoid them,” says Venetia Falconer, fair fashion campaigner.
While the Gen Zs targeted by Boohoo, Shein and copycat sites like Cider are vocal about the future of the planet – which harms the fast way – and workers’ rights, marketing is often influential. “The fashion system is functioning exactly as it is supposed to. It’s built this way so brands can race to the bottom,” says Falconer. Quality is irrelevant now that there is a one-and-done attitude towards wearing clothes.
Dr Patsy Perry, reader in Fashion Marketing at Manchester City University’s Manchester Institute of Fashion, says changing attitudes towards the longevity of our clothes could also be devastating for retailers. “The perennial problem with returns, where consumers are becoming very adept at using it as a hire service, and over-ordering, even when things are relatively cheap and low-cost, [and] returning a lot.” While the circular economy also appears to be growing – clothes resale platform Vinted was the UK’s second most popular shopping app last year – fast fashion is often not “resaleable” .
Few are optimistic about how things would improve. “Retail has changed so much since I’ve been involved,” says Jane Shepherdson, former CEO of Whistles and brand director at Topshop. “I can’t say I’m surprised by that [Boohoo] losing out to Shein, if you only offer low prices someone will always be under you.”
The family’s dividends may not look so rosy given Boohoo’s current state, but there’s still big money to be made for those who get their strategy right, says Thomas. She describes Shein as “the McDonald’s of ultra-fast fashion; they’re going to take over and push everybody else… you’re going to have Boohoos come and go, but they’ll come and go.”
