The Faithful county might not be a traditional fashion stronghold, to paraphrase the great Micheál Ó Muircheartaigh, but Offaly man and Boohoo CEO John Lyttle is playing at the highest level in a rapidly changing industry.
With the online fashion retailer valued at £4.2bn, he’s also among the most senior international executives from Ireland in any sector. If that valuation hits £6bn in the next three years Lyttle is in line for a personal bonus of £50m.
He’s come a long way from his days as a trainee manager in Penneys in Dún Laoghaire.
Lyttle has been CEO less than three years but it has been eventful. The CEO has had to take on board the findings of a damning report that found appalling conditions at some Boohoo suppliers in Leicester, including below minimum wage pay rates and dangerous working conditions.
Add in managing a large operation through the pandemic and Boohoo’s own decision to gobble up brands including Warehouse, Oasis and Debenhams that were effectively orphaned by the collapse of much of the British bricks-and-mortar retail trade.
Boohoo is a digital disruptor, but Lyttle is steeped in the rag trade, specifically Penneys.
From the shop floor, he went into Penneys HQ taking up buying and trading roles before moving to other fashion brands and then back to Primark as CFO, before joining Boohoo Group.
“Penneys was my start in retail, I started on the shop floor and then kind of worked my way through to where I am today,” he says in an unassuming manner.
“I’ve always had involvement in operations. I know how it all needs to come together to make it all work, building businesses and building businesses internationally. All the bits from the front end, what you see, the products, and how that store or website looks to what supports [are needed] at the back end.”
Launched in 2006, Boohoo undertook an initial public offering in 2014.
While the Boohoo brand itself is aimed at young women the company increasingly uses its digital skills to cater for a range of ages and budgets.
“It’s like a brand curve,” Lyttle says, “on the bottom end you’ve got the young fashions, you’ve got Boohoo, you’ve got Nasty Gal, PrettyLittleThing. And then we’ve got a group of brands like Oasis, Warehouse, Dorothy Perkins, Wallace et cetera. Then sitting on the top you’ve got Karen Millen.”
Those established brands are new acquisitions, snapped up opportunistically as the high street faltered after the company raised just under £200m on the markets and then plugged into Boohoo’s successful digital platform .
“We really wanted to extend the market that we were targeting, and obviously these brands we’ve acquired were more mid-market… If you look at Debenhams, as an example, it was a top 10 retailer in the UK from a market share, it had about 4pc of the total UK market share on clothing, textiles and footwear and had 19 million customers,” Lyttle explains.
Debenhams was a complex business, he says, with stores, online shopping, franchises and concession. Under Boohoo its a brand and available online, that’s it.
“Our view was that we’re a pure play online only, that’s what we’re good at and that’s where we saw the advantage for us in that brand going forward.”
While Boohoo Group is completely focused on online shopping – sales increased 41pc in the 12 months to February, helped by Covid restrictions – Lyttle is not convinced that the end is nigh for main street shopping.
“The high street is not going away,” he says.
“I think it just needs to get a better balance of consumer habits today. I think that consumerism is changing, as is the way people want to do things. But I don’t see the high street going away, I still think it’s got a part to play. But I do think consumers are demanding more from an experience point of view. Equally, I think they want a bigger mix of leisure, not just shops,” he adds.
Boohoo Group reported turnover of £1.75bn in its latest results and expects to grow business 25pc this financial year. About half of sales are in the UK, but existing markets remain the main focus for growth.
“Even though we’ve grown very fast we’re still tiny from a market share point of view. So there’s a lot more for us to do.”
The US is a “great opportunity,” too, he says, considering its size. But expansion there may be fraught as a consequence of the Leicester scandal
Earlier this year there were reports that the company and some of its suppliers faced a possible US import ban because of modern slave labour allegations linked to the Leicester scandal.
Boohoo is committed to the US and had no formal notification of any type about a potential ban, Lyttle says, and he says the business is addressing the supply chain.
Last year a review by Alison Levitt QC for Boohoo into suppliers in Leicester found “allegations of unacceptable working conditions and underpayment of workers are not only well-founded, but are substantially true”.
Levitt also found that “there is no evidence that Boohoo has committed any criminal offences”, but the company has taken action, Lyttle says.
His management team has “broken [the findings] out into 34 work streams, 20 of those are done. And the balance of 14 will be complete by September of this year”.
The company has been looking at its suppliers and “what were tier one versus tier two, as an example”.
“Tier one would be the manufacturer and a tier two, for example, would be like a sub-contractor making garments for tier one – we got to a conclusion that we only wanted tier ones. We didn’t want that tier two, because again, there was a lot of unapproved sites happening there,” he says. He adds that the company has done “a lot of work” in Leicester.
“We’re very committed to manufacturing in the UK and are proud to make garments in the UK. We probably needed more process and more management of our supply chain,” he adds. The company is also working with a third-party supply chain auditor Bureau Veritas. Later this year Boohoo will open its first factory in the city.
The US is a market where Boohoo wants to be and will be, he says.
“And we’re very committed to the US and actually, we hope in the next couple of years to have our first warehouse in the US to cope with that business.”
Companies like Boohoo specialise in fast fashion, the ability to replicate catwalk creations and turn them into affordable clothing aimed at the mass market.
Even addressing the specific issues at individual suppliers affordable prices mean tight margins with cost controls and high volumes the key to profitability.
Can that ever be compatible in a world where ethical consumers are tipped to be the coming force?
“The industry is moving that way. So every other retailer that’s doing business in any factory is asking for the same thing. When the demand goes that way and the industry changes,” Lyttle says, adding that “about 20pc” of its brands for this winter season will be made from sustainable fabrics or recyclable yarns.
Meanwhile there’s a push to bring brands like Dorothy Perkins, Coast, and Oasis back into the public consciousness.
About 10pc of turnover goes on marketing, including big name brand ambassadors.
“It’s through the channels that we think are appropriate for the different brands. You might have one of the Kardashians for PrettyLittleThing or it might be like an Amanda Holden for Karen Millen.”
“So it’ll be through marketing that will get that [brand] awareness back up. And making sure that people are aware that these brands still exist, that they’re stronger, that they’re better.”