Boohoo sees growing returns as sales increase

Online fashion business Boohoo has seen more clothes returned in recent months as customers changed their buying habits.

The business said the growth in net sales over the three months to the end of February had reached 7%, adding to a strong year for the company.

However the business has recently been suffering from higher return rates. It offered little explanation for this, saying merely that it is “due to product mix”.

Normally customers are more likely to return occasionwear to online retailers, as the fit is important to them.

During lockdowns, return rates dropped as people shopped for baggier clothing, which they were less likely to send back after trying on.

The higher return rates are set to continue, Boohoo said.

Net sales growth was 14% over the year to the end of February, and 61% when compared with two years ago.

However, the business faced problems internationally, where supply chain pressures caused by the pandemic meant that customers had to wait longer for their items to be delivered.

Chief executive John Lyttle said: “The group has delivered strong growth over the last two years, which has translated into significant market share gains.

“We are confident that pandemic-related headwinds are short term in their nature, and our focus is to ensure the business is well positioned for growth as these headwinds ease.”

The news comes days after Boohoo published a report by Sir Brian Leveson which concluded that the retailer will still face “challenges and difficulties” with its supply chains.

The business was at the centre of a scandal in 2020 when it was accused of buying clothes from manufacturers in Leicester whose staff suffered poor working conditions and below minimum wage pay.

In his final report for the company, Sir Brian said: “I have no doubt that there will continue to be challenges and difficulties along the way and Boohoo must be prepared to demonstrate that, in relation to each aspect of its business, it has exercised due diligence to ensure that legal and ethical standards have been maintained by all both in the business itself or, just as important, in its supply chain.”

He added that the firm had made progress towards targets, and had completed many of its plans.