Comment: Why Boohoo is retail's big winner

When Mahmud Kamani and Carol Kane started working together in the rag trade, they were sourcing and making fashion for the likes of TopShop.

At the time, Sir Philip Green’s chains were the kings of cool, commanding muscular profit margins from their must-visit stores in every town. Seeing the mark-ups he and their other customers were slapping on their goods, Kamani and Kane decided to sell direct to the public, keeping the juicy margins for themselves.

That was in 2006. Today, as they produce another blockbuster trading statement, Boohoo is worth nearly £4 billion and is one of the hottest retailers around.

There are many reasons why. To name a trio: short lead times from making half its clothes in the UK; brilliant execution from product design to delivery; and a strong management team now led by top brass from those other retail success stories, JD and Primark.

But behind it all is its best-in-show marketing. Boohoo spends 9% of its revenue on marketing — more than double that of its struggling rival Asos.

It gets serious bang for that buck from a clever mix of old and new media. Online, its brands have four million social media followers thanks to a roster of carefully chosen celebrity endorsers, while in trad media its omnipresent ads at Tube and rail stations mean they’re never far from the public’s minds.

The result of all this is steady 10% margins and year-in-year-out 25% turnover growth targets.

There will be banana skins. For starters, it will soon need to open warehouses abroad — a tricky act to pull off. But for now, it deserves its moment in the sun.

Arcadia, M&S, John Lewis; read ’em and weep.