PrettyLittleThing’s astute marketing strategy, coupled with Boohoo Group’s robust infrastructure, have helped propel growth at the young fashion etailer, industry experts have said.
Founded in 2012 by Umar Kamani, the son of Boohoo co-founder Mahmud Kamani, PrettyLittleThing has had a meteoric rise. Sales in the six months to 31 August 2018 soared 132% to £168.6m at the fascia, from £72.7m for the same period in 2017, which in turn was an almost fourfold increase (289%) on the same six months in 2016.
Boohoo – the core fascia in the group – had sales of £209m for the six months to 31 August this year.
Analysts believe PrettyLittleThing has a hit a sweet spot in a crowded market.
“The brand has resonated fantastically with the right customer groups,” says John Stevenson, a retail analyst at City broker Peel Hunt. “PrettyLittleThing started out as a relatively niche [accessories] brand in terms of its product base and the amount of options consumers have, whereas Boohoo is more broad. On the current trajectory, it looks like PrettyLittleThing will outgrow Boohoo in a couple of years.”
This sentiment is echoed by Daniel Bobroff, chief executive at creative technology firm Coded Futures: “It has a strong understanding of who its customer is and that is vital. Few businesses have that degree of clarity. [The team] understood the DNA of companies like Asos and looked to mirror them with great effect.
“That follows through in their clear identity of who they serve. It sounds very obvious when you run through it, but few have done it so well.”
On the current trajectory, it looks like PrettyLittleThing will outgrow Boohoo in a couple of years
John Stevenson, retail analyst at City broker Peel Hunt
He adds that the brand has focused on marketing mainly to a 16-to-34-year-old cohort of fashion-forward, digital-first, highly social, price-sensitive women.
Looking to the brand’s infrastructure, some observed that PrettyLittleThing bypassed many of the teething problems start-up etailers often encounter as it was able to piggyback on Boohoo’s established systems, leading to “unbridled growth”.
“It had an adult infrastructure from the beginning,” says Stevenson. “It’s not uncommon for ecommerces to hit various roadblocks: the website might not be good enough, or there may be issues in the warehouse, or in getting things through the supply chain, or with carriers.
“Because PrettyLittleThing grew under the umbrella of Boohoo, it already had the systems, warehouse, playbook, everything. Clearly, though, you also have to grow the right brand, have the right influencers and build a customer base.
Yet PrettyLittleThing has not been immune to growing pains. In July it moved its warehouse to Sheffield. This led it to suspend next-day delivery for a couple of days to clear a backlog of orders.
Kamani admitted on Instagram: “We have regrettably had to turn off next-day delivery and certain discounts in order to catch up with our current orders getting sent out. This is a temporary backlog due to overwhelming demand. I have to apologise for any delay on anyone’s orders.”
Retail analyst Nick Bubb plays down the issues: “The recent warehouse move from Burnley to Sheffield has been a big focus in the City and there were rumours that it hadn’t gone well, because of some delivery issues, but it was in fact a big success.
“Management deliberately tried to suppress order demand a bit, to avoid putting the distribution system under too much pressure during the transition, cutting back on next-day delivery. But demand stayed strong.”
As the etailer builds its customer base, it is inevitably stealing market share from both traditional high street players, as well as its online-only rivals.
“Its growth has been at the expense of the traditional players such as Miss Selfridge, Primark and even Asos,” says Bobroff.
Although its overall market share remains fairly small – 3.5% of a £55bn market, estimates Stevenson – the potential for further growth is massive. The latest Drapers Multichannel Insight report shows 41% of 18-to-24-year-olds and 55% of 25-to-34-year-olds shop online at least once a week ().
A strong social media presence – PrettyLittleThing has 9 million followers on Instagram, compared with 7.6 million and 5.8 million of Asos and Boohoo respectively – coupled with relevant celebrity collaborations, keep the etailer front of mind for its demanding customer base. Using the wider group’s supply chain and systems enable speed to market, and a smooth customer experience.
As tough retail trading continues to bite in the UK, PrettyLittleThing is poised to carve itself an ever bigger slice of the young fashion market.
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