Their customer lifetime value was less then their acquisition...

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nicktra

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05/12/18

11:04

Post #: 36756059
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Originally posted by True_Value: ↑

We know Boohoo have have implemented Afterpay but they have also recently rolled it out to their other business; Nasty Gal (2.8m Instagram followers). Boohoo have been rapidly expanding throughout the US. Nasty Gal filed for bankruptcy a few years ago and Boohoo ended up acquiring the IP rights of the business. While Nasty Gal only did ~£18m for the 6 months to Aug 2018, that represented growth of 111%. Something I'll need to research is what happened to Nasty Gal when it filed for bankruptcy. Prior to this, it had annual revenue in excess of of £300m in 2015 which represented a tripling in sales in three years with a 5 year revenue CAGR of 92.4%.

Nasty Gal's prior issues aside, let's see what Afterpay bring to Boohoo and vice versa over the next few years as they look to continue to expand in the US. Boohoo are targeting revenue growth of 40% this year and have a medium-term annual revenue growth target of 25% p.a. and a 10% EBITDA margin. Boohoo (as a group) did revenues of £68.2m in the US for the 6 months to Aug 2018, this was up on the £39.6m of revenue they did during the same period last year.

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Their customer lifetime value was less then their acquisition costs, sales continued to drop, marketing budget decreased and rest is history.

Last edited by nicktra: 05/12/18

APT Price at posting: $13.47 Sentiment: None Disclosure: Held
1 Upvote

0 Great analysis

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