ANALYSIS New York –Swedish fashion e-tailer Boozt raised its profitability forecast for 2020 for the second time in two months after recording a jump in the second quarter sales as the customers turned to online shopping amidst the COVID-19 pandemic.
Boozt announced sales rose 38 percent year-on-year during the second-quarter, reaching a revenue of 1.22 billion Swedish Crowns (140.2 million dollars.) This revenue generation comes from a 29 percent surge in its core platform Boozt.com. Additionally, Booztlet.com jumped by 168 percent. Operating profit soared 146 percent on revenue of 120 million crowns.
At the time of the forecast update, CEO Hermann Haraldsson said the shifting from offline to online was at an accelerated pace, and the site added 3 million new Nordic customers to the platform. He further explained that there was a surge in shopping across all the segments contributing to revenue.
Boozt to leverage second-quarter growth to brace for Amazon’s entrance in Sweden
Boozt, as well as other retailers in the region, are currently gearing up for a stiff competition after Amazon announced its plans to launch an official Swedish site last month. “We are optimistic that, by focusing on the things we believe customers will place the greatest emphasis on - low prices, a wide range and fast deliveries - we will eventually be able to win the trust of Swedish customers,” said in early August Alex Ootes, vice president for EU Expansion at Amazon. Back then, shares of Boozt AB edged lower. The stock has gained 116 percent in year-to-date, per Reuters data.
Up until now, Swedish consumers could buy on other European Amazon sites and have orders delivered. For example, the Swedish website amazon.se was still directing customers to amazon.de with an option to deliver to Sweden. Amazon has still to release a date for the launch of the website, a spokesman said.
“The next step is to introduce a complete retail offering in Sweden and that is what we plan to do now”, explained the company earlier in the summer. Logistics group Kuehne and Nagel told Reuters it was building a contract logistics facility in Eskilstuna, about 100 km west of Sweden’s capital Stockholm.
Daniel Ovin, senior analyst at Nordea, said that based on a report written in October autoparts, sporting goods and general merchandise would be the most exposed sectors after an Amazon entry in the Nordics. He added that retailers in United States, Britain, Germany and France that have adopted successful strategies to meet the challenge from Amazon have turned to premium products, sharpened their delivery mechanisms, increased private labels or added brands that were not sold on Amazon.
Photo: Boozt official website