Boohoo bounces back from scandal as cash-strapped influencers keep plugging its brands

The Leicester factories scandal at online fashion giant Boohoo is likely to take as little as 5% off its sales, according to detailed social media analysis which found influencers flocking back to promote the brand in recent weeks.

Key to Boohoo's success has been its sophisticated use of Instagram and YouTube stars close to the hearts of its teenage customers. Its digital marketing through social media generally has set it apart from rivals, so search data from Google and other engines can give an accurate picture of trading patterns.

Analysts at brokerage Sandford C Bernstein today showed how Boohoo had brought vital influencers back on board after the scandal first broke, citing management's "behind-the-scenes" work to "retain and reassure" the social media stars who plug its products.

Boohoo may have also benefited from influencers' dwindling income from cash-strapped brands during Covid to persuade them to stay loyal, Bernstein said.

Research from social media marketing platform Socialbakers last month showed the number of brands working with influencers had fallen 37% on last year as brands pulled back on advertising.

"In a year when influencers are getting much smaller pay cheques than normal due to massive cuts in brand marketing budgets we are not surprised that many influencers chose not to drop Boohoo," the report says.

"After a brief period of quiet, influencers are now back in full force promoting items across the portfolio of brands."

Bernstein cited recent posts promoting Boohoo's Nasty Gal and PrettyLittleThing brands by fashion favourites such as the model Chandra (whose Lame.Cobain site has 231,000 Instagram followers) and YouTube star Sydney Crouch (with 242,000 Instagram followers).

Bernstein tracked social media followership of Boohoo's brands and found that, after a small dip after news stories last month alleged poor working practices at a Leicester supplier, the trend has now reversed for Boohoo, PrettyLittleThing and Nasty Gal.

On TikTok, followership continues rising with a particularly big spike for NastyGal in the past week.