Boohoo (BOO.L) has bought bust fashion chains Oasis and Warehouse for £5.25m ($6.59m), as sales soar at the online fast fashion retailer.
Boohoo said on Wednesday it had agreed a deal with Hilco Capital, which bought the Oasis and Warehouse brands and stock from administrators in April.
Oasis and Warehouse were placed into administration in April, with the loss of more than 1,800 jobs after a buyer could not be found for the high street stores.
Boohoo said the businesses would be “a complementary addition to our portfolio of brands”. Last summer Boohoo bought Karen Millen and Coast’s online businesses out of administration, part of a push to target an older demographic of shopper.
Oasis and Warehouse generated online revenues of £46.8m last year, according to analysts at Barclays, but the “ramp up” of sales will likely be slow as Boohoo integrates the businesses.
“It’s up to Boohoo to rejuvenate them and hope they resonate well with its traditionally younger, more fashion forward customer base,” said Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown.
“It’s a similar move to the Karen Millen and Coast acquisitions, but while we’ve heard trading’s going well with these additions, we haven’t had any numbers to crunch, so it’s hard to say what the big picture looks like.”
Boohoo raised £200m to pursue acquisitions in May and said it “continues to appraise opportunities”. The company will update shareholders in due course”.
Boohoo published a sales update alongside the acquisition news. Revenue grew by 45% to £367.8m in the three months to 31 May, well ahead of analyst forecasts.
The company said it was also on track to “deliver another year of strong profitable growth, and ahead of market expectations”. Boohoo forecast revenue growth of 25% for the full year.
“Whilst there is a period of uncertainty within the markets in which we operate, the group is well-positioned to continue making progress towards leading the fashion e-commerce market globally,” chief executive John Lyttle said.
Analysts at Barclays said Boohoo was “blowing the lights out” with its sales update. Shares rose 9.6%.