Boohoo, an online fashion retailer, has taken control of PrettyLittleThing, the fast-growing website set up by the children of Boohoo’s co-founder Mahmud Kamani. “This is a very good deal for shareholders,” said Boohoo’s chairman, Peter Williams, before adding that it was a “natural fit” for the company.
PrettyLittleThing (PLT), aimed at 16-24-year-olds, was founded by Kamani’s sons, Umar, Adam and Samir, in 2012. Boohoo is paying £3.3m for the 66% owned by Adam and Samir, while Umar and other senior managers will continue to speak for 34% as part of a five-year performance-related deal agreed with the board.
To avoid accusations of a conflict of interest when Boohoo listed on the junior market in 2014, the prospectus included the option to acquire PLT for £5m within three years.
Last year PLT sales jumped 400% to £17m in the 12 months to end of February 2016. Like Boohoo, PLT is based in Manchester with its headquarters housed in a former mill in Ancoats that was once operated as a knitting factory by Umar’s uncle.
Williams said Mahmud Kamani, Boohoo’s joint chief executive, was not involved in the PLT negotiations. “We went through an independent process to arrive at this deal,” he said. The outcome, he added, struck a balance between exercising the option to buy PLT and retaining the talents of the executives who were running it so successfully.
The deal was announced as Boohoo upgraded its sales and profit forecasts for the current financial year, sending its shares up more than 12%. It expects sales to rise by between 38% and 42%, an improvement on its previous guidance of 30-35%.
PLT describes itself as offering “killer affordable style to female fashion breakers and makers”.
