Trading update

Jun 15, 2021

Earnings release

Hello, and welcome to boohoo Group PFC Trading Update Call. Call. And just to remind you that this conference call is being recorded. Today, I am pleased to present John Lithow, CEO. Please go ahead with your meeting. Good morning, everyone. Thank you for joining us this morning for our Q1 trading update call. I'm John Little, Group CEO of the boohoo Group, And I'm joined this morning by Mammut Kamani, our Executive Chairman Carol Kane, our Group Co Founder and Executive Director and Neil Tato, our Group CFO. I'm going to take you through our Q1 trading update, which we released this morning, alongside an update on our agenda for change progress. We will then open up the line for any questions. So on to the results for the period. We are delighted with the strong performance this quarter. Revenues totaled £486,000,000 up 32% year on year. Our brands continue to grow strongly, And we are encouraged by the early performance following the relaunch of our new brands. It's been an impressive quarter versus strong comparatives, Stores reopening as lockdowns ease and continued market uncertainty. It's a particularly strong performance against a very strong Q1 last year, With the group delivering 91% growth over the last 2 years, which is a phenomenal achievement, and in our view, Further demonstrates that the channel shift online from the pandemic is here to stay. In the UK, sales growth has accelerated, Up 50% compared to last year and 95% over the last 2 years, with over £250,000,000 of revenues in the quarter. The U. S. Continues to perform strongly, up 43% year on year against the strong comparative period last year. The U. S. Remains a key international focused market for the group, and we're delighted to have delivered sales growth of 157% over the last 2 years. And across the UK and U. S, the group has more than doubled in the last few years. Sales were down year on year in Europe and the rest of the world, Which is in line with our expectations. We saw strong growth in Europe at the start of pandemic during Q1 last year when we grew 66%. This market has been more challenging and uncertain during this quarter with markets in Europe experiencing a more delayed reopening compared to the UK and U. S. For the rest of the world, growth has slowed in recent quarters, which we believe is impacted by service disruption from the pandemic. Gross margin was 55%, down 60 basis points year on year due to the exceptional level of full price sales that we achieved last year. It is, however, flat on a 2 year view, which highlights the resilience of our trading performance when compared to more normal times. We closed the quarter with a strong cash position of £199,000,000 with significant investments in the quarter in our infrastructure and operations, as well as new office premises in London, as previously announced in April. Operationally, we continue to build for the future at pace. We are very pleased with the integration and relaunch of our newly acquired brands, Berkey Perkins, Wallace and Burton. These brands will help underpin the group's growth As they gather momentum and as we continue to build out the product ranges. In Debenhams, we're making excellent progress growing our fashion, beauty and homeware ranges. We have now launched beauty and just last week launched our first brands on the marketplace as we transformed Debenhams into a digital department store. Our Wellingborough warehouse, which currently houses Caronmillan Coast Warehouse and Oasis is now operational. And our Daventry warehouse, which will house some of our newest brands, is on track to go live in Q2. And for our London based brands, We were delighted to secure a location for them all to operate from, and we have moved into a great new location in SoHo that is now fully operational also. We have made further great progress on our sustainability journey in the quarter, where we published our upfront sustainability strategy back in March, alongside our U. K. Supplier list. And we remain on track to publish our international supplier list in September. Since our full year results in May, I'm pleased to announce that we have joined the Fast Forward initiative, which will add greater oversight to our U. K. Supply chain, And we will transition all U. K. Audits to the Fast Forward initiative over the next 12 months. So Brian Leveson has also published this morning his 3rd progress report on the group's agenda for change program, detailing the excellent progress that the group has made Against the delivery of the recommendations made last summer. It highlights the determination of the group to develop and demonstrate a gold standard In relation to the supply chain and to all aspects of ethical, transparent and sustainable business practice. As part of our continued commitment to transparency, We have published a report this morning, and it's available to read in full on our website. And lastly, on outlook. We are feeling confident that with the strength of our platform, great trading in our existing brands and successful integration and relaunch of our newest We are on track to deliver another year of strong profitable growth, notwithstanding the significant investments that we are being made at the group build for the future. The group has made a strong start to its financial year against challenging comparatives. And in line with expectation, uncertainty remains in a number of markets that the group operates in around the world as a result of the pandemic. Guidance, therefore, remains unchanged from the group's last update in May 2021. As a reminder, revenue growth is Our medium term guidance remains at 25% sales growth per annum with a 10% adjusted EBITDA margin, reflecting the Board's So in summary, it's been a great start to the year. We've continued to demonstrate strong growth against a strong comparative period, and the newly acquired brands have been relaunched successfully. We see more and more opportunities arising as markets reopen, and we are well positioned for the rest of the year and look forward to providing you all with further updates on our sustainability strategy in due course. And with that, thank you very much for dialing in. I would now like to open the line for questions. Thank We have a question from the line of Alida Rayo from Barclays. Please go ahead. Thank you. I've got two questions. The first is, can you talk a little bit about the KPIs driving growth in Q1 in terms of active customers, order frequency, average order value, etcetera? And then more specifically, in markets where you saw a year over year decline of a tough comp, can you help us understand The KPI is driving that as well. Hi there, Alvir, it's Neil here. So On the KPIs that are driving growth, it's you've obviously seen we've overall, we've seen strong growth Against those comps from last year. Last year, what we saw in Q1 was relatively high average order values, Slightly flatter order frequency and an increase is in active customers, so new And what we've seen in Q1 this year is still good levels Customer acquisition, slightly lower transaction values than we saw last year, but it has been mixed And but overall, that's what's happened. And then the order frequency is at Slightly higher levels than Q1 last year. And in the tougher markets, it's been similar trends, With lower levels of customer acquisition and active customer growth, so that's what we've seen there. So that's consistent with what we're seeing, which is just really tough comps last year in Europe, in particular, where we saw a big Surge early on in lockdown and then it kind of tailed off gradually throughout the rest of the year. But Q1 and You see we have those really big comps in Europe. Great. Thanks. And just one follow-up. Just on Europe in particular, obviously lockdown has been slower to ease in those markets. Has that Not had any benefit in terms of retail being closed? I think retail has been Open a little bit. I think the big factor has been the lockdown, there's been curfews, etcetera, and people just haven't Had as much of a reason to go out and to travel. I know some of the big rationales where we've seen positives, and I think this is In Europe, over the big events like Black Friday going back to November, December and then Easter was relatively strong in Q1. So that gives us some Strong in Q1. So that gives us some optimism and it vindicates what we're saying that I think people have just got a bit tired of buying lockdown flows, not as many reasons to buy a new outfit to go out. And really, I think the opportunities post as we leave the pandemic in the wake, then we see Europe as a massive opportunity. That's helpful. Thank you. Our next question comes from the line of Anne Critchlow from Societe Generale. Please go ahead. Your line is open. Thanks. Good morning, everyone. I've got two questions. Firstly, on the marketplace, have you had any talks yet with potential fashion partners? And what the timing that you're thinking about to really transform that into a fashion marketplace? And then secondly, at the full year results, You mentioned a very impressive sustainability commitment that you hoped 30% of all brands would have sustainable materials this time next year, I think. I'm just wondering, given the inflationary pressures in the supply chain, whether you can reach This ambition within your current margin guidance? Thanks very much. Yes. So John here. I'll take the sustainability one. So yes, we're still on target to Those mixes across all the brands for next year. And again, feeling very confident that we can achieve those with the current margin guidance. And then in terms of marketplace, yes, we're having lots of great conversations with key fashion players. And again, you'll be seeing The onboarding of some of those players over the coming months. We're still in a build situation. As you can imagine with the platform, we had our first A couple of marketplace brands launched last week, but it builds by week and by month going forward. But some great Thank you. Which of the fashion brands have you launched already? I wouldn't comment on the fashion brands we're in discussions With regards to those, but some of the ones that we've launched with our previous dividend. So for example, Regatta will be one of the ones that we've done. Yes. Thank you. Our next question comes from the line of Charlie Muir Sands from Exane BNP Paribas. Please go ahead. Yes. Thanks very much for taking my questions. Sticking with Debenhams for a minute longer, I just wondered, could you talk about what you're experiencing with respect to things like site traffic since you So compared to what the site was performing at, let's say, this time last year, are you still attracting as many Consumer to debentums.com as you previously were, obviously, notwithstanding the fact that you haven't got the full range yet built out? Thanks. Like all of our previous acquisitions, it's when we launched the brand, relaunched the brand, it's a soft launch. And obviously, it's about building product ranges before we really switch on marketing to an extent of driving that traffic. So we're at that early stage of building the website, onboarding more brands. You'll see, for example, beauty At that stage, that will press the marketing button as such. And the I think you guided for the full year the M and A contribution at around about Five points of the 25% growth you're aiming for. Firstly, is that still what you're expecting? Can you give us the number for Q1, please? So, yes, we guided a 25% growth And 5% of that contribution coming from M and A and the Dorothy Perkins, Wallace And Burton. So we're sticking with that guidance. And obviously, the run rate was slightly above that in And the outperformance was from both the established brands and The new brand as well was above that 5% level. I'm not going to tell you what it was because it was different every week Mainly because of the variability on the growth from the more established brands just of the different fluctuations, different patterns. So we're sticking with that as the guidance for this year. There's a lot of uncertainty, Not just around established brands with the pandemic and how that plays out over the next 9 months, Also the new brands and how much traction they get, how early. So all of those uncertainties, the safest The guidance is the same as it was a few weeks ago when we first announced it. And I think everybody has felt that the outperformance would come from the new brands, but it's good to see in the Q1 that we've been a little bit above the run rate from the Existing brands as well, particularly against the tough comps that they had from last year. Great. Thanks. And one final question, if I may. I just wondered if you could give us any color around the trends over the quarter. I know that last year, you obviously experienced quite a lot of volatility with Weakness at the start of the pandemic and lockdown and then very strong particularly towards the end of May. But Perhaps with reference to 2019 levels, is the exit rates broadly consistent with the 2 year Back or how should we be thinking about the trend as we move into Q2? It's been broadly But what you saw last year was a massive ramp up in April May and with the highest growth rate being in May. So you've got that back to anniversary, but you've had the almost the inverse pattern within that. So it has been quite variable as the So in the U. K, you had lockdown restrictions being eased through the quarter from the beginning of it really And in April. And then but last year, it was the other way around where you went into the hard lockdown halfway through March. And you saw really last year the pattern was a big surge in Europe. And then and that's where we've been blocking those big pumps in Europe, whereas in the U. K. Actually it was A bit more of a modest bounce from when we first went into lockdown and then quite Consistent growth rate through the year, whereas in Europe, they've held off. And then U. S, it was Almost in between those, we think, very short, a pretty strong surge initially in lockdown and then a bit of moderation, but not much. So it's really hard to say what's going to be happening with the different patterns of lockdown. I think what we I think there's a lot of optimism is what we've got in the U. K. Great portfolio of brands Are all doing well. And that's what we want to see in all of the international markets. So I think the multi brand strategy is being Our next question comes from the line of John Stephenson from Peel Homes. Please go ahead. Hi, good morning guys. A couple of questions as well please. First off, can you talk around how the shopping trends themselves have sort of shifted, lockdown restrictions have eased, Particularly in terms of the product mix and brand performance, yes, pretty much over the quarter. Then second question, just picking up on the Devenham's point and the 5% figure that you're running ahead of. I mean, How was the start down building on the sort of latest batch of acquisitions? Because we would imagine this would be sort of very much second half weighted. So to be already Kind of running ahead of that initial guidance, but surely, but quite well. So in terms of if I take the shopping fence first, Yes. Look, we've seen a change. We've obviously been coming into summer as well. You can imagine in the last couple of weeks, we've had great weather in the UK. So I've kind of flipped into dresses as an example away from the dominance, I would say, of our pleasure Has been quite strong. We've seen dress categories as a mix, for example, actually raise above pre COVID levels In the last couple of weeks, that bodes really well for going forward and how people are shopping when you're coming out of lockdown, but equally kind of Addressing the weather as well. So we've seen some of this last year, I would say in the summer of last year, but it's certainly much stronger at the moment In terms of that trend in the similar product, obviously, people are still unsure, maybe a little bit more sure in Europe about holidays, but still in the UK, It's still uncertain that I've been able to take a holiday and travel. So we'll need to see how categories like swimwear, etcetera, play over the summer months. It's definitely changing, a lot of it driven by weather. And then hopefully, if we get to middle of July and again, particularly in the UK, If kind of clubs reopen and it's not sort of tables of 6 in a par, then I think you'll We see that kind of going out, really kind of driving even stronger. And on the New brands or new acquisitions results. So when I was saying that the over performance on the 5% That wasn't really from Devenance because Devenance was literally only launched April 12. So the more the performance outperformance from the acquisitions has come from Dorothy Perkins, Wallace and Burton. And what happened there was that is that we've been we replatform those brands onto our Tech Stack in halfway through the quarter. And we've also been selling the inventory that we acquired as part of the acquisition, so we've replatformed and then we will be moving more towards Full price sales through the rest of the year and that's the uncertainty around how much traction we're going to get with that. So that's where it could come back. And at the same time, we've seen the growth on the existing brand is slower than it was. And therefore, that could be where In the mix of things, the new brands may not contribute as much. Okay. But it came in to be So well to be doing so well in the Q1, when you're not expecting to have sort of full beauty offer. And 3rd party brands sort of All singing before just before peak sounds like a pretty good start. I think we're pleased with the way it's gone. And we're starting from We scratch and we're building up the proposition, on boarding brands in beauty and the clothing marketplace brands. So It's extremely early days for dominance. Fantastic. And just a final comment while I'm on the mic. Just in terms of the returns percentage, don't know if you can put a number on how it shifted as the sort of product mix has come a little bit more normalized. So the return exactly as we About the full year update that we were expecting returns rates to move back towards more normal levels, But it would be a function of the product mix. We're starting to see that, but the returns rate isn't back at normal levels yet because the product mix Is it back at normal levels? But having said that, you've seen some great performances in dresses in the just the most recent weeks. So that will push up the returns rate a little bit. So exactly as we've explained that we were expecting the returns rates To move up and the distribution costs remain elevated, that's basically playing out as we'd expected. We have a question from the line of Michael Benedict from Berenberg. Please go ahead. Good morning all. Thanks very much for taking my question. Just one for Maurice from me. You ended the quarter in a strong net I wondered if you're in a position to think about deploying that cash on any further sort of M and A activity or do you feel like you've got, obviously we're integrating the recently acquired brands. Nila just spoken about them. They're still at a very early part of their journey. But we did raise money last year with a view to acquisitions. So we're always looking, it's what I would say, for opportunities, Not just in the UK, but equally in Europe and in the U. S. Great. Thanks very much. Our next question comes from the line of Simon Bowler from Numis. Please go ahead. Hi, good morning all. Three quick ones if it's okay. Firstly, was there any kind of notable And trends between the more established brands of boohoo and PrettyLittleThing. Secondly, you mentioned rest of world was impacted by you suspect Impacted by the service proposition. Can you just kind of flesh out what's changed and have there been any other changes to your propositions in the U. S. Or EU? And then finally, the stock that was acquired with the Topshop Brands, how far through that are you now? Is that kind of largely complete and you've got sort of inventory file that you're targeting? So on the differences between boohoo and plc, we've actually shown similar trends. So we have got the luxury of being able Lots of different brands in lots of different markets. And we have seen just similar patterns across all of the brands. And therefore, it feels like that's why we think it's more around lockdown patterns, what's happening. And so The trends have actually been very similar with boohoo and PLT. And although they've got slightly different Concentrations in different markets, for example, boohoo has got higher concentration in Europe than PLT, They both seem very similar trends. The rest of the world, I think, has been Has it been impacted by service proposition? I think it probably has. The cost of distribution to Australia and New Zealand Much higher. And lead times have not got shorter, and they're probably a little bit longer, As you can imagine, but if anything, they've probably improved a little bit since their lowest point last year. But it's difficult to say again even with those anticipated markets, it's more around What's been happening in lockdown? What are people buying, etcetera? And then on the inventory Side on the ex Arcadia brands. We've made a lot of progress clearing the inventory. And you can imagine it wasn't that relevant for springsummer. So there's a much higher mix now of the springsummer stocks. Although some of the inventory that we acquired was on the water and it was very relevant, but we made good progress clearing through that. Thank you. Our next question comes from the line of Georgina Joanne from JPMorgan. It was really just going back, I guess, to kind of The European performance and just any more color that you could give on that? And particularly, I mean, do you think you're well, I guess, clearly, you're losing Share in the online market there at the moment. I suppose the question would be, do you think you're losing share in sort of the sub segment in which And also really just trying to understand the disconnect between players like Zalando who are still growing strongly online In that market, do you think you effectively kind of took more than your fair share, if you like, at the start of the crisis? What you're saying is you're giving that some of that back now and it's normalizing? Or is competitive pressure actually ramping up? Or was The range is not quite right or something. Just any more color would be really helpful. And I guess following on from that, could you share any comment From how the cohort that you acquired in Europe at the start of the crisis It's performing now, please. So really, I think it's more the latter of what you were talking about that we did Yes. Maybe a bit more than our fair share in Q1 and the start of Q2 last year. Because we kept our services going very well, but we didn't see any kind of impact Initially in lockdown, whereas others did, but then they came back very strongly. I think that's the phenomenon You've got that. But we're obviously still gaining market share there. So some of the market stats we're seeing for the European markets are down quite heavily overall For clothing and fashion, so we're nearly 50% bigger than we were pre pandemic. So we are taking share. And but having said that, we're so small in most of the Markets, I think it's we would expect to be taking significant share. And we want to take more market We have done compared to last quarter last year. But we're 50% bigger than we were Pre pandemic and a lot of omni channel retail brands are pleased to be getting back to Pre pandemic levels, even when they've had a bit of a reopening boost. So the online pure plays are taking share and some of the numbers that we've seen from the pure plays are extremely Strong. But if you compare them to us, our numbers were stronger earlier on and then they accelerated later And perhaps more steadily. So I think you've got all of that. We definitely know we're in the right place. We're online an online pure play. I think everything we've seen means that online businesses can be more flexible and That's where the future is. And so I think that's what you've got there, but extremely big comps in Q1 last Yes. And then we're really waiting for people to get back to more normal and have reasons To buy outfits, and I think that's coming later for Europe. Thanks. And Pat, just a brief follow on, if I may. You mentioned that negative performance was in line with your expectations, I think referring to both rest of world and rest I mean, should we be expecting rest of world in particular to remain sort of negative through The balance of the year where the service propositions still impacted, just any help on that would be great. I think it's difficult to give much help there really because it's just so much uncertainty as to what is going to happen with lockdown And traveling as well. So those are the big uncertainties. I think We've maintained our guidance at the same level as we did a few weeks ago, and that was based on an uncertain situation. If anything, the fact that there is a lot of uncertainty in the market is, If anything, the fact that there is a lot of uncertainty in the market has been vindicated. You saw that last night that we've had a postponement of restrictions being lifted in the U. The restrictions being lifted in the U. K. Hopefully, we'll start moving through that. If you look at our comps, Q2 is going to be tough comps again as for Q1. And then, we would look at them as getting a bit easier later in the year once you get to what's peak And the party season and autumn winter. Well, and it's anybody's guesses whether that is going to be the case. I think we're all very Hopeful that there will be Christmas parties and the life will be a lot more normal through the winter, which I think bodes well, But who knows? Let's hope so. Great. Thank you very much. Our next question comes from the line of Wayne Brown from Liberum. Please go ahead. Thank you very much. Can you just give us some sort of a view as to how the mix Between paid and organic and what the retention rates have looked like in the last quarter? So generally, I think there's been a trend over the last 5 years paid social has become more and more important. And therefore, you've seen a reduction in the mix Organic traffic in favor of social media. Autopaysearch has made quite a good comeback It's a really effective marketing channel. So we never give that breakdown of Split. But for us, what I would say is that we've always had that headroom in our marketing plans to be able It covers all of the channels. And that's above the line. Above the line marketing is still very important to us, But so is the paid channels of paid search and paid social in particular. So you've seen a little bit of a reduction in the organic mix, but I think that's an industry wide trend over the last 5 years With the rise of Instagram and the continued importance of social media. So retention over the last few months has been good. What we've seen is that if you compare to Last year, we saw very much huge increases in traffic and huge Decreases in conversion rates, and we've seen that invert again because we're in an inverted situation with regard to lock Okay. And then, sorry, last one. Any material change or Notice for change in the mix of revenue coming from new versus repeat? No. That's been quite consistent. But again, compared to last year, we probably we had a big boost in new customers Through April, May and into June. And so that change has been year on year, you could see it, But actually it's been quite consistent through the last 9 months, the mix of new and repeat customers. Okay. Thanks a lot, Neil. Thanks, Neil. Our next question comes from the line of Ben Hunt from Investec. Please go ahead. Good morning. Probably have to wait for the interims to get the answer to this, but your cash generation from an underlying perspective looks pretty strong since February. Was there anything occurring from a working capital perspective? Or is it just actually very profitable sales in this period? No, nothing from a change in any working capital cycle. So we've had the normal Good cash generation. And then we've had large amounts of capital expenditure on the London office And then the distribution centers, so exactly as we indicated at the last update. Okay. And then was there any discernible trends with the how you deployed your marketing in the period? Because I mean, softer in Europe and rest of the world, but UK was very strong. And I guess linked to that and Wayne's previous question, has there been any change in the actual customer acquisition cost that you're seeing at all? Customer acquisition costs are higher, again, as we'd indicated, but We've been if you go back to Q1 last year, we pulled back on a lot of marketing costs And then the traffic came more naturally and actually less expensively In lockdown, and then things have generally got more competitive. Well, for us, we've been wanting to build the awareness of the brand. So we've continued to do that even in sort of fairly difficult markets In a way, so customer acquisition costs have generally come up a little bit. And that's what I was saying, but we're investing in new brands. And for the existing brands, we've still kept Awareness building going. So we're optimistic that that's going to stand us in good stead as lockdown restrictions get eased. Okay. And no discernible differences between the geographies and how you deployed your marketing? We've had a good two answers. Yes, Carol is going to I'll jump in there. Good morning. It's very different for each brand. So it's very hard to generalize on where mixes are in territories because We have established brands which have larger international presence, have different brand digital Marketing spends as well. And then obviously, all the new brands are all on the start of their brand awareness journey, so they have a high percentage of Brands awareness spend and less digital. There are our established brands are having more digital spend currently Because that's really as a result of COVID, because we haven't been able to get out into market and do the brand awareness piece that we would normally do from a PR facing or collaboration and events and that type of thing. So the brand mix has very much been tailored a lot this year, One for new brands and for established brands just because of COVID and things, we've been unable to execute due to the restrictions. So we flipped into more digital, but coming this summer when things are opening up, that's about to change again. And there's going to be a little bit more brand awareness activity starting, certainly with Love Island, I would say, in the UK As a good example, this coming summer, hopefully You'll see a lot more of us down the tube if you've been there recently as well. So We haven't been in the last year. Yes. That's right, John. We're back on the underground. Our next question comes from the line of Anubhav Malhotra from Liberum. Please go ahead. Hi, guys. I just had a couple of questions. Firstly, on the rest of world performance, if you could provide any details on which particular geographies were doing better or which were worse Compared to the average of the Rest of World division. And then on as Karol just mentioned, the brand mix The marketing mix is quite different by brands. So maybe could you give us an idea of some of your new brands are at a much higher price point like Karen Millen? How does the marketing mix for them differ than the overall group average? Is it generally towards the lower price point? Thank you. From the rest of the world, the main markets for us there are the anti PDU markets Australia, New Zealand. And We've seen similar trends there, but it's just a bit softer for us. And, Paul, we're still at those similar levels that we were a couple of years ago. And, but not Key not massively key markets for us now. And the growth is going to come from the other regions. There's markets in the rest of the world that are huge opportunities for the future as well, but we're not even starting to tackle those. And on the kind of customer acquisition marketing cost for the higher price I think we've even for Caramillion, it's quite early days yet because we bought them in And then we went into the pandemic in March last year. So what we've been is very encouraged by the fact We thought it would be more expensive to acquire Caron Milling customers than it has been. So that's Promising, but we still want to be able to really, really grow Caramil and the other higher price point brands. And I think once we To more normal markets, we'll be able to see some fairly rich themes in terms of number of customers. And it will be great if we can keep customer acquisition costs where they currently are, but I think with bigger campaigns, they'll probably initially get a little bit more expensive to Those customers and then but overall, we're quite encouraged with the way those higher price point brands have gone. And I think it Indicates our theory that the online model works not just at the younger end of the market with lower Price points, but it's a big opportunity in the rest of the market as well. I'll just add on to that. The major there's very much the thought process of how you market to different brands is very much the mixers aren't terribly depending on what stage they're at. However, when you look at a Caramilin, a 2 you collaborate with, So just to give an example, we've done several collaborations with an influencer called Lydia Millen. She wouldn't be an appropriate Influencer 4FCs on a PLT on boohoo, which is very appropriate for a Caramillen brand. And similarly, something like a brand like Oasis, we've just done a collaboration with the RHS on botanical prints because that fits that brand. So really, the mixes and acquisition costs, as Neil said on terribly different, but the message of getting those traffic and who you collaborate with is where the Our final question comes from the line of Eleonora Dairy from Shore Capital. Please go ahead. Good morning. Thanks for taking my questions. 2 from me. The first is, are you seeing any shipping related cost inflation when sourcing from the Far East? And secondly, how are Devenom's suppliers reacting to ESG concerns? Do they appear satisfied with the work you are undertaking? Thank you. So with regards to the Devenham's suppliers and ESG, we're having some conversations, but minimal Is the way I would describe it. If, for example, I look at the most of the suppliers, for example, the brands who are on the marketplace, About 40 of those brands were doing about 9% of the business and they've all signed up as an example to come back on board. So that will give you a view With regards to where they are there. And then in terms of shipping, like most businesses around the world, whether it's airfreight, whether it's sea freight, Particularly airfreight, it's limited. And obviously, it's more expensive, as Neil has described earlier. But we're moving our goods From every country that we source in around the world and we're getting our goods in. There's probably a little bit of a lag on lead time, We'll be up to a week on average, I would say. And that's really about congestion getting into airports or ports. But principally, we're not having any issue moving our goods There are no further questions at this time. Please go ahead, speakers. Okay. So thanks everybody very much for joining This morning, another stunning quarter delivered from the boohoo Group, and we look forward to catching up with you all again in September. Thanks. Bye. This now concludes our conference call. Thank you all very much for attending. You may now disconnect your lines.