Just because Boohoo’s latest update wasn’t much worse than expected, doesn’t mean it was any good either and it still seemed to spook investors.
Sales are falling, margins are being heavily squeezed and the company has nudged revenue guidance lower.
AJ Bell’s Russ Mould said: “At least Boohoo is making progress on the basics of retail, carefully managing its costs, cash and inventory so it can keep paying the bills and avoid being left with lots of unwanted stock which it then has to shift at a major discount.
“Longer-term doubts about the whole online fast fashion model remain. One offshoot of the cost-of-living crisis could be a less disposable culture. Online returns can be a hassle and now Covid restrictions are no longer an obstacle, people might prefer to go into a shop and try clothes on before they purchase them.
“Boohoo may be hanging on to some of the market share gains it made during the pandemic but there has certainly been a fightback from physical retail in the clothing space.
“Add on social and environmental concerns about the way its clothes are made – with Boohoo having a far from unblemished record in its supply chain – and there are plenty of obstacles to winning back the market’s favour.”