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Boo hoo cries out over higher clothing returns and shipping costs as profit sinks

Boohoo, the online fashion retailer, has announced  a crumple in earnings as the business was banged by lofty product answer and a billow in prices.

The company, which picks out 16-40-year olds, pleasured a 14% hike in proceed to nearly £2bn in the year to February.

But Boohoo said its crux was saved by important cargo and coordination cost push and cautioned that the epidemic-connected components will carry on to influence it this year.

Pre-tax profits materialize at £7.8m - down from £124.7m during the previous 12 months.

The down turn also echoed a considerable  increase in investment, including the commencement of two new UK distribution centres, the relaunching of Debenhams as an online-only retailer and the assimilation and relaunch of the newly gained  Dorothy Perkins, Wallis and Burton trademark 

The company had cautioned on yearly  profit in December and predict  that interruption to international supplies and higher inbound cargo costs would carry on this year but said it was toiling to root additional products from "near-shore" markets to reduce lead times.

John Lyttle, the chief executive, said he was aiming a figure of 60% from current levels of around 40% to reduce exposure to elevated inbound air and sea cargo price from Asia - particularly China, which is continuing to face significant COVID interruption.

Boohoo said it would concentrate on keeping the market share gains it had acquired over the course of the past two years  and  affirming it would optimise  efficiencies where necessary before passing prices on to shoppers.

Mr Lyttle said Boohoo was gaining market share in the UK and the US, and, in  the last two years, had developed  active customer numbers by 43% to 20 million.

But dividends  slumped  by over  15% - building on sharp deficits  over the past year.

Emily Salter, senior apparel investigator at GlobalData, said of the update: "This slowdown was inevitable as the group simply could not sustain such high levels of (sales) growth.

This will be apparent in FY2022/23, with the group expecting revenue growth to be in the low single digits, a sobering slowdown as it continues to feel pressures from the supply chain crisis, elevated returns rates and uncertain consumer demand."

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