Brexit is likely to drive up prices at Boohoo, with additional costs largely relating to distribution and administration to blame.
In a market update this morning the online retailer said it had implemented a system that was designed to minimise the impact of Brexit on its European customers, and it would try to mitigate extra costs where possible.
Shares in the online retail giant were down 3.4 per cent this morning, on the news.
Boohoo enjoyed revenue growth of 40 per cent in the final months of 2020 and expects to report around 37 per cent revenue growth for the financial year.
The online retailer said it had cash of nearly £387m to support future growth, and that it was close to finalising an extension of its UK warehousing capacity, with a new site to open in April 2021.
Poor working conditions
Boohoo came under fire last year after several failings were found in the online fashion retailer’s supply chain in England, following allegations about working conditions and low pay. As a result Boohoo cut ties with 64 suppliers.
The group then set about righting wrongs, appointing retired judge Brian Leveson to independently check its drive to improve its supply chain and business practices.
Leveson’s first report was published today and found Boohoo had taken “long lasting and meaningful change to the group’s supply chain and business practices.”
Boohoo group executive chairman Mahmud Kamani said: “I’m immensely proud of the speed with which our team has worked to effect change during such a challenging period for the group, and it’s encouraging to see our progress acknowledged in the report.
“We’ve added further independent experience to the board and its committees in the period, and I was delighted to welcome Shaun McCabe to the board in November. I’d like to take this opportunity to thank our team for their exceptional hard work over the last few months, and to reinforce our commitment to being a leader for positive change in UK textiles manufacturing.”