Boozt - the modern department store?

One of the recent years' most impressive growth stories, especially during the inflationary times, is the Swedish online fashion retailer Boozt. The company has been somewhat of an outlier in the online fashion space (or department stores for that matter) as it has continued to grow throughout the pandemic and the high-inflation period. Very few companies have been able to do that.

Boozt has started to call itself the ”Nordic Department Store,” albeit the company sells only online and with a rather limited number of fashion-related categories. However, the company's success does arise from how it has diversified its operations.

Geographically Boozt has expanded from the core Swedish full-price market to the entire Nordics and other parts of Europe. Also the discount arm Booztlet has grown much more rapidly than the core site.

Since the first quarter of 2018, the ”Rest of Europe” segment’s revenue share has grown from 5,6% to 23% during the last quarter. At the same time, Booztlet has grown from 4% to 18%.

Even though some parts of the company have seen occasional revenue declines, there have always been other parts of the company that have grown rapidly, balancing out the decline.

The growth during this quarter is coming on a solid base as most of the core metrics are moving in the right direction. The number of orders, average order value, and the number of active customers are all increasing. Customers also seem to be increasingly buying from more than one department, emphasizing the reason for calling the company a department store.

Only the Net Promoter Score has slightly declined.

Also, the key financial metrics have improved. Gross margins have declined from the pandemic highs but remain significantly above the pre-pandemic levels. On the other hand, the profitability has improved during the previous years as the costs have been managed.

Outgrowing most of the peers

The performance of Boozt is illustrated when the company is compared to its most important peers. Against both online as well as Nordic fashion retailers, Boozt has been outgrowing both groups of peers.

Of the companies that have reported their Q3/2023 results so far, only the fashion discounter Primark grew more rapidly than Boozt. It is worth noting that the discount arm of Boozt, Booztlet, grew by +31% during the last quarter. The growth is naturally coming from a very low base.

All in all, the growth pace that Boozt is reporting puts it on par with the most successful fashion retailers, Primark and Inditex (not reported Q3 yet). Maybe, after all, there is something for the traditional department stores to learn as they struggle with their declining fortunes?