What's boohoo's secret?
Earlier this week boohoo emerged as the clear winner of a very difficult Christmas.
While rival Asos issued a profit warning in December after a bleak November, the UK experienced the worst Christmas retail sales for ten years.
Amid all the gloom came the shining light that is boohoo. This week boohoo group, which is responsible for brands boohoo.com, PrettyLittleThing and Nasty Gal, reported 44 per cent overall growth in the final four months of 2018.
Other retailers looked on enviously and wondered what their secret was.
The answer can be found in the statement Mahmud Kamani and Carol Kane issued to accompany the figures. “We are delighted to be reporting yet another great set of financial and operational results and would like to say a very big thank you to all our team and customers,” they said. “We remain firmly focused on continuing to provide our customers with great fashion at unbeatable value.”
And there you have boohoo’s formula for success in one paragraph. A formidable partnership between its co-founders and an unshakable belief in giving customers what they want at an unbeatable value.
It’s a message that has resonated with its core market of 16-to-24 year-olds who don’t want to spend a lot of money on clothes, shoes and accessories. And it’s all reinforced by a slick marketing and social media message, including the use of a lower case ‘b’ in ‘boohoo’.
I’ve interviewed Kamani and Kane (I’d prefer to use their first names in the blog but it will appear too informal) on a number of occasions over the last six years and this blog won’t betray a confidence or contain any world-stopping revelations. The company and the couple have been well covered by the media, especially after it floated in 2014 and valued the business then at £560m.
Most of our meetings have taken place in boohoo’s unremarkable-looking red brick building in Manchester’s Northern Quarter, which is a world away from the glamour and models pictured on social media.
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Somewhere in the labyrinth of corridors and passages in the dated five-storey building is Kamani’s office. On the wall are a load of flatscreen monitors with real-time information on every aspect of the business and he follows it like a hawk.
He knows what’s selling and what’s not. I’m not a retail expert but if a particularly brand is selling well boohoo has a short supply chain that means they can focus their resources on that immediately.
While some retailers have moved at a glacial pace to changing trends, boohoo has stayed ahead of the curve by being super agile. Time is money.
I knew Kamani and Kane before the IPO and their fortunes definitely haven’t dulled their passion and attention to detail. He says business is like a jigsaw that keeps changing so you never finish it.
So who are Mahmud Kamani and Carol Kane?
Kane is from North East and speaks with a faint accent. She loves dogs but not as much as she loves fashion. Her mother worked at Burtons and her daughter would make clothes out of swatch books for her Barbie dolls.
Kamani is larger than life and wears his heart on his sleeve. If he had a swear box he’d need to empty it on a regular basis. Whenever we meet his phone goes off constantly. He’s a busy man but always responds personally to emails and still sends handwritten thank you notes.
He describes himself as a “simple man”, evidenced by the fact that he had a collection of 50 black Hugo Boss T-shirts in his bedroom so he didn’t waste time on deciding what he was going to wear in the morning.
A few years ago I interviewed his eldest son Umar Kamani, who founded PrettyLittleThing.
I asked him what lessons he learned from his dad and he recounted the time he was 11 and he saw a toy he wanted for £25. His dad took him outside and gave him £20 and said if he wanted it bad enough he’d get the shopkeeper to sell it to him at that price.
When I checked the story with his dad he confirmed it was partly true. “It was £15,” he said. “And it should have been £10!” I don’t think he was joking as he knows where the cheapest petrol stations are in Manchester.
Kane and Kamani are a formidable combination. She praises him as an entrepreneur and for his passion while her influence is obvious in the fashion, products, marketing and brand. I once said they were like a married couple but she corrected me by saying they were more like brother and sister.
Ultimately boohoo’s success is simple. Strong leadership is coupled with clear focus. It sells its own clothes to fashion-hungry customers with limited budgets. While analysts fixate on the share price, Kamani and Kane focus on running the business - while having fun at the same time. It’s a formula others retailers could learn something from.