Superior sales growth and margins


Boohoo sales are growing at a 40% pace compare to ASOS 18%. However, the market is valuing ASOS at 100 times’ earnings compared to 54 times’ at Boohoo.


Boohoo’s superior gross margin of 58% trumps ASOS’s 48%. Not surprisingly, Boohoo’s net margin is better than ASOS (6% vs. 2.3%, respectively).



Right business model



The company has chosen the right model to run its business because online retail sales growth is expanding at an annual pace of 12.1% to the year to June compared with 1.1% from stores sales.



Size range



Like with ASOS, Boohoo has a wider variety of size range to choose from compare to traditional stores fixed set of range. Also, traditional retailers have all the sizes in one particular store.



Social media awareness



Given that social media allows engagement with its customers directly, Boohoo and ASOS has an edge over those who don’t embrace social media.



That is because the customers can suggest fashion trends which would help the company stay ahead of the pack. So, a look at its social media gives us the following results:



Twitter



Boohoo has a total of 450k followers and according to Twitter Audit it has 377k “real followers” vs. 68.6k “fake followers”.
And with ASOS, it has a total of 977k followers with 800k real and 177k fake.




Facebook


Boohoo has 2.3m likes against ASOS 4.26m likes.


Boohoo use celebrities such as Charli XCX to endorse its brands.





An emerging international business



Boohoo has a global presence with over 30% of sales coming overseas.


Though smaller than ASOS (60% of sales from overseas), this is a growing trend for the business




The cash pile/low debt to expand its empire



Boohoo’s cash pile of £60m represents 8% of market value, and this is higher than ASOS where cash in bank accounts for 3% of market value. Also, Boohoo debt is relatively small at 5%.




Growing market share/filling the void left behind from the bankruptcies and reduction in business size of declining retailers



Boohoo sells to low-end customers where their most expensive jeans are £30 a pair.



And, if you look at H&M and Primark UK operations it has combined sales of over £6bn, whereas Boohoo’s sales total £200m.



The company’s sales…

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