Trading update

Jun 15, 2021

Earnings release

Hello, welcome to boohoo Group Q1 Trading Update Call. Throughout this call, all participants will be in a listen only mode, and afterwards there will be a question and answer session. Just to remind you that this conference call is being recorded. Today, I am pleased to present John Lyttle, 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 Lyttle, Group CEO of the boohoo group, and I'm joined this morning by Mahmud Kamani, our Executive Chairman, Carol Kane, our Group Co-founder and Executive Director, and Neil Catto, 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. Onto the results for the period. We are delighted with the strong performance this quarter. Revenues totaled £486 million, 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 U.K., sales growth has accelerated, up 50% compared to last year and 95% over the last 2 years, with over a quarter of a billion GBP of revenues in the quarter. The U.S. continues to perform strongly, up 43% year-on-year against a strong comparative period last year. The U.S. remains a key international focus market for the group, we're delighted to have delivered sales growth of 157% over the last 2 years. Across the U.K. and U.S., the group has more than doubled in the last 2 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 the 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 U.K. 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 two-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 million, with significant investment in the quarter in our infrastructure and operations, as well as new office premises in London, as previously announced in April. Operationally, we continued to build for the future at pace. We are very pleased with the integration and relaunch of our newly acquired brands, Dorothy Perkins, Wallis, 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 brand on the marketplace as we transform Debenhams into a digital department store. Our Wellingborough warehouse, which currently houses Karen Millen, Coast, Warehouse, and Oasis, is now operational. Our Daventry warehouse, which will house some of our newest brands, is on track to go live in Q2. 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. 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. Sir Brian Leveson has also published this morning his third 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. 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 brands, we are on track to deliver another year of strong, profitable growth. Notwithstanding the significant investments that we are being made as the group builds for the future. The group has made a strong start to its financial year against challenging comparatives. 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 expected to be around 25% for the current financial year, and we expect to report an adjusted EBITDA margin of 9.5%-10% for the full year. Our medium-term guidance remains at 25% sales growth per annum, with a 10% adjusted EBITDA margin, reflecting the board's confidence in the group's prospects as it continues to build for the future. 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. With that, thank you very much for dialing in, and we'd now like to open the line for questions. I have a question from the line of Eleonora Dani 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, et cetera? Then more specifically, in markets where you saw a year-over-year decline of a comp, can you help us understand the KPIs driving that as well? Hi there, Eleonora. It's Neil here. On the KPIs that are driving growth, you've obviously seen 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 in active customers, so new customers. What we've seen in Q1 this year is still good levels of customer acquisition, slightly lower transaction values than we saw last year, but it has been mixed across the brands. Overall, that's what's happened. The order frequency is at slightly higher levels than Q1 last year. In the topper markets, it's been similar trends, but with lower levels of customer acquisition and active customer growth. That's what we've seen there. 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 tailed off gradually throughout the rest of the year. Q1 and Q2, we had those really big comps in Europe. Great. Thanks. 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's been open a little bit. I think the big factor has been that lockdown, there's been curfews, et cetera, and people just haven't had as much of a reason to go out and to travel. Those are some of the big rationales. Where we've seen positives, and I think this is true in Europe, that over the big events like Black Friday, going back to November, December, and then Easter was relatively strong in Q1. 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 clothes. Not as many reasons to buy a new outfit to go out. 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-Laure Bismuth 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? What sort of timing are you thinking about to really transform that into a fashion marketplace? 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. John here. I'll take the sustainability one. We're still on target to achieve those mixes across all the brands for next year. Again, feeling very confident that we can achieve those with the current margin guidance. In terms of marketplace, yes, we're having lots of great conversations with key fashion players. 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 2 marketplace brands launch last week, but it builds by week and by month going forward. Some great conversations we're having at the moment. Thank you. Which of these fashion brands have you launched already? I wouldn't comment on the fashion brands we're in discussions with regards to those. Some of the ones that we've launched with are previous evidence. For example, Regatta would be one of the ones that we've done. Yeah. Thank you. Our next question comes from the line of Charlie Morton from Exane BNP Paribas. Please go ahead. Yeah. 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 compared to what the site was performing at, let's say this time last year? Are you still attracting as many consumers to debenhams.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, when we relaunch the brand, it's a soft launch. Obviously, it's about building product ranges before we really switch on marketing to an extent of driving that traffic. We're at that early stage of building the website, onboarding more brands. You'll see, for example, beauty brands are onboarding on a weekly basis now, but that takes time overall. Once we're in a good position there at that stage, then we'll press the marketing button as such. I think you guided for the full year the M&A contribution at around about 5 points of the 25% growth you're aiming for. Firstly, is that still what you're expecting, and secondly, can you give us a number for Q1, please? Yeah, we guided at 25% growth and 5% of that contribution coming from Debenhams and the Dorothy Perkins, Wallis, and Burton. We're sticking with that guidance. Obviously the run rate was slightly above that in Q1, and the outperformance was from both the established brands and the new brands as well, so we're above that 5% level. I'm not going to say what it was because it was different every week, actually. Mainly because of the variability on the growth from the more established brands, just because of the different fluctuations, different patterns. 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, but also for new brands and how much traction they get, how early. All of those uncertainties, the safest assumption is that the guidance is the same as it was a few weeks ago when we first announced it. I think everybody's felt that the outperformance would come from the new brands, but it's good to see in the first quarter 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. Thank you. 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 we 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. Perhaps with reference to 2019 levels, is the exit rate broadly consistent for the 2-year stack, or how should we be thinking about the trend as we move into Q2? It's been broadly that, but what you saw last year was a massive ramp-up in April and May, and with the highest growth rate being in May. You've got that back to anniversary. You've had almost the inverse pattern within that, so it has been quite variable, as you just pointed out. In the U.K., you had lockdown restrictions being eased through the quarter from the beginning of it, really, and in April. Last year it was the other way around where you went into the hard lockdown halfway through March. You saw really last year the pattern was a big surge initially in Europe. That's where we've been lacking those big comps in Europe. 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 rates through the year. In Europe, they've tailed off. In the U.S., it was almost in between those 2 things where you saw a pretty strong surge initially in lockdown and then a bit of moderation, but not much. It's really hard to say what's going to be happening with the different patterns of lockdown. I think what gives us a lot of optimism is what we've got in the U.K., a great portfolio of brands that are all doing well, and that's what we want to see in all of the international markets. I think the multi-brand strategy is being vindicated and working really well. Thank you. Our next question comes from the line of John Stevenson from Peel Hunt. Please go ahead. Hi, good morning, guys. A couple of questions as well, please. I mean first off, can you talk around how the shopping trends themselves have shifted with lockdown restrictions have eased, particularly in terms of product mix and brand performance pretty much over the quarter? Second question, just picking up on the Debenhams point and the 5% figure that you're running ahead of. How was the start on building on the latest batch of acquisitions? We'd imagine this would be very much second half weighted. To be already running ahead of that initial guidance must surely be quite well. In terms of, if I take the shopping trends first, 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 U.K., that flip into dresses, as an example, away from the dominance, I would say, of athleisure, 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, equally, addressing the weather as well. We've seen some of this last year, I would say, in the summer of last year, it's certainly much stronger at the moment in terms of that trend into summer product. Obviously, people are still unsure, maybe a little bit more sure in Europe about holidays, still in the U.K., it's still uncertain about being able to take a holiday and travel. We'll need to see how categories like swimwear, et cetera, play over the summer months. It's definitely changing. A lot of it driven by weather. Then hopefully, if we get to the middle of July, and again, particularly in the U.K., if clubs reopen and it's not tables of six in a bar, then I think you'll probably see that going out really driving even stronger. On the new brands or new acquisitions results. When I was saying that the overperformance on the 5% were, that wasn't really from Debenhams, because Debenhams was literally only launched April 12th. The more the performance, outperformance from the acquisitions has come from Dorothy Perkins, Wallis, and Burton. What happened there is that we re-platformed those brands onto our tech stack halfway through the quarter. We've also been selling the inventory that we acquired as part of the acquisition. We re-platformed, we will be moving more towards full price sales through the rest of the year. The uncertainty around how much traction we're going to get with that. That's where it could come back. At the same time, we've seen the growth on the existing brands a bit slower than it was, therefore that could be where, in the mix of things, the new brands may not contribute as much. Okay. Given to be so well in the first quarter, when you're not expecting to have the full beauty offer and third-party brands all singing before, just before peak, sounds like a pretty good start. I think we're pleased with the way it's gone, but we're starting from basically scratch, and we're building up the proposition, building onboarding brands in beauty and the clothing marketplace brand. It's extremely early days for Debenhams. Fantastic. Just a final comment I want to make, just in terms of the returns %. I don't know if you can put a number on how it's shifted as the product mix has gone a little bit more normalized. The return, exactly as we spoke about at 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 isn't back at normal levels. Having said that, you've seen some great performances in dresses in just the most recent weeks. That'll push up the returns rate a little bit. Exactly as we'd explained, that we were expecting the returns rates to move up and the distribution costs to remain elevated. That's basically playing out as we'd expected. Brilliant. No, thanks, John. Thank you. Thank you. I remind you that if you want to ask a question, you will have to press 01 on your telephone keypad now. We have a question from the line of Michael Benedict from Berenberg. Please go ahead. Morning, all. Thank you very much for taking my question. Just one from me. Ended the quarter in a strong net cash position, clearly. I wondered if you're in a position to think about deploying that cash on any further M&A activity, or do you feel like you've got, I guess, enough on your plate as things stand? Thanks very much. We're integrating the recently acquired brands. Neil Catto just spoken about them. They're still at a very early part of their journey. We did raise money last year with a view to acquisitions. We're always looking is what I would say, for opportunities, not just in the U.K., 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. Morning, all. Three quick ones, if it's okay. Firstly, were there any noticeable differences in trends between the more established brands of boohoo and PrettyLittleThing? Secondly, you mentioned Rest of World was impacted by the service proposition. Can you just flesh out what's changed and have there been any other changes to your propositions in the U.S. or EU? Finally, the stock that was acquired with the Topshop brands. How far through that are you now? Is that largely complete and you've got an inventory file that you're targeting? On the differences between boohoo and PLT, they've actually shown similar trends. So we have got the luxury of being able to see lots of different brands in lots of different markets, and we have seen just similar patterns across all of the brands. Therefore, it feels like that's why we think it's more around lockdown patterns, what's happening. The trends have actually been very similar with boohoo and PLT. Although they've got slightly different concentrations in different markets, for example, boohoo has got a higher concentration in Europe than PLT, but they've both seen very similar trends. The rest of the world, I think, has it been impacted by service proposition? I think it probably has. The cost of distribution to Australia and New Zealand are much higher and lead times have not got shorter, and they're probably a little bit longer, as you can imagine. If anything, they've probably improved a little bit since their lowest point last year. It's difficult to say again, even with those Antipodean markets, it's more around what's been happening in lockdown, what are people buying, et cetera. On the inventory side, on the Arcadia brands, we've made a lot of progress clearing the inventory. You can imagine it wasn't that relevant for spring/summer. There's a much higher mix now of the spring/summer stocks. Although some of the inventory that we acquired was on the water, and it was very relevant. We made good progress clearing through that. Thank you. Our next question comes from the line of Georgina Johanan from JPMorgan. Please go ahead. Good morning. Thanks for taking my question. It was really just going back, I guess, to the European performance and just any more color that you could give on that. Particularly, 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 the sub-segment in which you play? 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 took more than your fair share, if you like, at the start of the crisis, and what you're saying is you're giving some of that back now, and it's normalizing or is competitive pressure actually ramping up, or was perhaps the range not quite right or something? Just any more color would be really helpful. I guess following on from that, could you share any comments on how the cohort that you acquired in Europe at the start of the crisis is performing now, please? Really, I think it's more the latter of what you were talking about, that we did get 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 impact initially in lockdown, whereas others did. Then they came back very strongly. I think that's the phenomenon that you've got there. We're obviously still gaining market share there. Some of the markets that we're seeing for the European markets are down quite heavily overall for clothing and fashion. We're nearly 50% bigger than we were pre-pandemic. We are taking share, but having said that, we're so small in most of the European markets, I think we would expect to be taking significant share. We want to take more market share than we have done compared to quarter last year. We're 50% bigger than we were pre-pandemic, and a lot of omni-channel retail or brands are pleased to be getting back to pre-pandemic levels, even when they've had a bit of a reopening boost. The online pure plays are taking share, and some of the numbers that we're seeing from the pure plays are extremely strong. If you compare them to us, our numbers were stronger earlier on, and then they accelerated later, and perhaps more steadily. I think you've got all of that. We definitely know we're in the right place. We're 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. I think that's what you've got there. Extremely big comps in Q1 last year, and then we're really waiting for people to get back to more normal and have reasons to buy outfits. I think that's coming later for Europe. Thanks. Perhaps 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 of Europe. Should we be expecting rest of world in particular to remain negative through the balance of the year, where the service proposition's 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. 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 has been vindicated. You saw that last night, that we've had a postponement of 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. We would look at them as getting a bit easier later in the year, once you get towards peak and the party season and autumn, winter. It's anybody's guesses whether that is going to be the case. I think we're all very hopeful that there'll be Christmas parties and life will be a lot more normal through the winter, which I think bodes well. 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 all your traffic between paid and organic, and what the retention rate has looked like in the last quarter? Thanks. Generally, I think there's been a trend over the last 5 years that paid social has become more and more important, and therefore you've seen a reduction in the mix of organic traffic in favor of social media. Also paid search has made quite a good comeback as a really effective marketing channel. We never give that breakdown of split. For us, what I would say is that we've always had the headroom in our marketing plans to be able to cover all of the channels, and above the line marketing is still very important to us. So is the paid channels of paid search and paid social in particular. 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 five years with the rise of Instagram and the continued importance of social media. Retention over the last few months has been good. What we've seen is that if you compare to last year, last year we saw very much huge increases in traffic and huge decreases in conversion rates. We've seen that invert again because we're in an inverted situation with regard to lockdown. Sorry, last one. Any material change or noticeable change in the mix of revenue coming from new versus repeat? No. That's been quite consistent. Again, compared to last year, we had a big boost in new customers through April, May, and into June. 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. Our next question comes from the line of Ben Hunt from Investec. Please go ahead. 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 was it just actually very profitable sales in this period? No, nothing from a change in any working capital cycles. 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. Exactly as we indicated at the last update. Okay. Then were there any discernible trends with how you deployed your marketing in the period? Softer in Europe and rest of the world, but U.K. was very strong. 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. If you go back to first quarter last year, we pulled back on a lot of marketing costs and then the traffic came more naturally and actually less expensively in lockdown. Things have generally got more competitive. For us, we've been wanting to build the awareness of the brand. We've continued to do that even in fairly difficult markets in a way. Customer acquisition costs have generally come up a little bit, and that's what we've seen. We're investing in new brands and for the existing brands, we've still kept that awareness building going. We're optimistic that that's going to stand us in good stead as lockdown restrictions get eased. Okay. Are there discernible differences between the geographies in how you deploy your marketing? We've had. Do you want to take it? Yeah. Yeah. 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 to digital marketing spend as well. Obviously, all the new brands are all on the start of their brand awareness journey. They have a high percentage of brand awareness spend and less digital. Where 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 markets and do the brand awareness piece that we would normally do from a PR facing or collaboration and events and that type of thing. 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. We've shifted to more digital. 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 U.K. as a good example this coming summer. Hope that answers. You'll see a lot more of us down The Tube if you've been there recently as well. Yes. We haven't been in the last year. That's right, John. We're back on the Underground. All right. Very good. Thanks. 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 are worse, compared to the average of the rest of world division. As Carol just mentioned, the marketing mix is quite different by brand. 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 generally towards the lower price point? Thank you. On the rest of the world, the main markets were there are the Antipodean markets, Australia, New Zealand, we've seen similar trends there, it's just a bit softer for us. We're still at those similar levels that we were a couple of years ago, not massively key markets for us now. 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, we're not even starting to tackle those. On the kind of customer acquisition marketing cost for the higher price point brands, I think even for Karen Millen, it's quite early days yet because we bought them in October, we went into the pandemic in March last year. What we've been is very encouraged by the fact that we thought it would be more expensive to acquire Karen Millen customers than it has been. That's promising. We still want to be able to really grow Karen Millen and the other higher price point brands. I think once we get to more normal markets, we'll be able to see some fairly rich themes in terms of number of customers, and it'll be great if we can keep the customer acquisition costs where they currently are. I think with bigger campaigns, they'll probably initially get a little bit more expensive to acquire those customers. 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 thought process of how you market to different brands is very much the mixes aren't terribly different depending on what stage they're at. However, when you look at a Karen Millen, it's who you collaborate with. Just to give an example, we've done several collaborations with an influencer called Lydia Millen. She wouldn't be an appropriate influencer for us to use on a PLT or boohoo, but she's very appropriate for a Karen Millen brand. Similarly, something like a brand like Oasis, we've just done a collaboration with the RHS on botanical prints because that fits that brand. Really, the mixes and acquisition costs, as Neil said, aren't terribly different. The method of getting that traffic and who you collaborate with is where the creative know-how comes in. Excellent. Thank you so much. Our final question comes from the line of Eleonora Deri from Shore Capital. Please go ahead. Good morning. Thanks for taking my questions. Two from me. The first is, do you see any shipping-related concentration when sourcing from the Far East? Secondly, how are Debenhams suppliers reacting to ESG concerns? Do they appear satisfied with the work you are undertaking? Thank you. With regards to the Debenhams suppliers and ESG, we're having some conversations, but minimal is the way I would describe it. If, for example, I look at most of the suppliers, for example, the brands who are on the marketplace, about 40 of those brands were doing about 90% of the business, and they've all signed up as an example to come back on board. That'll give you a view with regards to where they are there. In terms of shipping, like most businesses around the world, whether it's air freight, whether it's sea freight, particularly air freight, it's limited. Obviously it's more expensive, as Neil has described earlier. 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, probably up to a week on average, I would say. That's really about congestion getting into airports or ports. Principally, we're not having any issue moving our goods from any of our key sourcing countries. Thank you. Thank you. There are no further questions at this time. Please go ahead, speakers. Okay, thanks everybody very much for joining us 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. Bye. This now concludes our conference call. Thank you all very much for attending. You may now disconnect your lines.