(Bloomberg) -- Boohoo.com Plc is on a tear after the online fashion merchant’s sales almost doubled last year.
Revenue for the full year climbed 97 percent, the company said in a statement Wednesday, offering investors in U.K. retail stocks some relief. Shares of brick-and-mortar store operators such as Next Plc and Marks & Spencer Group Plc tumbled last month after John Lewis Partnership Plc issued a profit warning. Boohoo is also heavily investing in country-specific websites and warehousing so it doesn’t lose ground to Amazon.com Inc. as well as rivals Asos Plc and Zalando SE.
The outlook for Boohoo, which sells clothing under labels such as NastyGal and PrettyLittleThing, is more encouraging than consensus estimates and the company’s valuation suggest, Jefferies analyst Niraj Amin wrote in a note to investors.
Shares in the Manchester, England-based retailer climbed as much as 18 percent in early London trading, the most since June last year, paring the loss so far this year to 7.2 percent after concerns over the company’s pace of reinvestment sparked a selloff. Given investor worries about the scalability and sustainability of earnings margins, the company’s forecast Wednesday of margins between 9 percent and 10 percent “should also be taken well,” Morgan Stanley analyst Andrea Ferraz wrote in a note to investors.
Boohoo has been drawing inspiration from Zara’s industry-leading speed of design -- and has moved even faster. After ordering a broad range of products in small quantities, more than half of which are made in the U.K., the retailer requests more of the ones that sell and stops buying those that don’t.
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