Advertisement

Mahmud Kamani: a modern rags-to-riches tale

Mahmud Kamani turned fast-fashion website Boohoo into a business worth billions. The coronavirus crisis may have brought the company’s biggest challenge yet.

When Boohoo, the Manchester-based fast-fashion sensation, floated in 2014, the FT observed how business in the old “Cottonopolis” had changed. Although the former mill district in the city’s northern quarter was still “a centre for the rag trade”, fortunes once made “by making clothes” were “now made from selling them”. No-one better exemplified this shift than Mahmud Kamani – an entrepreneur who “grew up on these streets” and went on to disrupt the British high-street with his online emporium.

Advertisement - Article continues below

The firm’s “explosive growth” – on the back of its PrettyLittleThing and Nasty Gal brands, plus some clever Instagram marketing – has defied the “doom and gloom” engulfing many rivals, says Business Insider: in the past five years, it has gone from £195m in sales to £1.2bn, making a billionaire of Kamani.

Sweatshops in the spotlight

This month, Boohoo hit its first rough patch since listing. With up to 3,000 new lines arriving on its website each week, the firm’s status as “teen tailor of choice” was built on reacting quickly to trends, says the FT. Hence the need to source locally: over half of the company’s clothes are made in the UK – by a network of small, independent, mainly Leicester-based factories. The Midlands city has long attracted scrutiny over working conditions in these, but it took the Covid-19 pandemic and a resulting Sunday Times investigation into unhealthy “sweat-shops” to make this an urgent issue.

Advertisement - Article continues below
Advertisement
Advertisement - Article continues below

Hence some £2bn was wiped off Boohoo’s value last week amid allegations about some of its suppliers. The firm said that it was “shocked and appalled” by the claims, had severed ties with two suppliers and commissioned an independent investigation into its supply chain, notes The Daily Telegraph. But given a row over the generous bonuses awarded to Kamani and Boohoo co-founder Carol Kane, the timing was unfortunate. Some investors are spooked about how thoroughly the company knows its own supply chain.

Doubtless Kamani, 55, will hope this turns out to be a small bump in Boohoo’s spectacular trajectory and in his family’s rags-to-riches tale. Kamani’s father, 

Abdullah, arrived in Britain from Kenya in 1968 “with a wife, four children and a few hundred pounds” and got into the rag trade using “family ties with Asia and Africa to import clothing”, says FT. The young Kamani cut his teeth in the business selling cheap clothes, under the Pinstripe label, to high-street brands including H&M, Topshop and Primark.

Advertisement - Article continues below

It was there that he met Kane, a designer for the brand. Both were quick to see the internet as a way “to cut out the middleman” and market directly to customers, says The Sunday Times. So in 2006, they set up Boohoo. The partnership covered all the bases: “He had the money, while Ms Kane knew the industry and the tastes of fashionable young women”, says the FT. It helped that Kamani was a natural salesman with “bags of energy”.

Keeping it in the family

All three of Kamani’s sons caught “the family bug”. PrettyLittleThing was set up by Adam and Umar in 2012 when they were teenagers. The youngest son, Samir, now heads the menswear division, BoohooMan. 

The younger generation are practised hands on social media – titillating followers with shots of celebrity parties, glamorous cars and exotic holidays. But Kamani himself rarely gives interviews.

Earlier this year he stepped down as CEO to become Boohoo’s executive chairman, but this is unlikely to be a prelude to retirement. “Some people like golf, others like football. I like work,” he once told The Mail on Sunday, pointing out that, even at the age of 80, his father still showed up in the office every day.

Advertisement
Advertisement

Recommended

Don’t squeeze our entrepreneurs with higher taxes
Economy

Don’t squeeze our entrepreneurs with higher taxes

Britain’s entrepreneurs and business innovators get generous tax breaks. They should keep getting them.
17 Nov 2019
Great frauds in history: Billy McFarland – the man behind the Fyre Festival
People

Great frauds in history: Billy McFarland – the man behind the Fyre Festival

Around 5,000 people paid Billy McFarland up to $100,000 each to attend the lavish Fyre Festival on a Caribbean island. They arrived to find accommodat…
5 Aug 2020
Stuart Wheeler : the granddaddy of spread-betting
People

Stuart Wheeler : the granddaddy of spread-betting

A lifelong obsession with gambling helped make Stuart Wheeler his fortune. By using that to back the Brexit campaign, he changed the face of British p…
2 Aug 2020
Great frauds in history: Joe Nacchio’s insider trading
People

Great frauds in history: Joe Nacchio’s insider trading

Joe Nacchio, CEO of telecoms firm Qwest, was convicted of 19 counts of insider trading in 2007 and served four years in prison.
30 Jul 2020

Most Popular

BP has slashed its dividend – and markets love it
Income investing

BP has slashed its dividend – and markets love it

BP has bowed to the inevitable and cut its dividend in half – and its share price promptly rose. John Stepek explains what it means for shareholders …
4 Aug 2020
Listed companies are dying out, and that could have serious consequences
Stockmarkets

Listed companies are dying out, and that could have serious consequences

Private equity is taking over from public stockmarkets as the biggest provider of capital to companies. That’s bad for investors and bad for society a…
3 Aug 2020
Can the recent rally in sterling continue?
Sponsored

Can the recent rally in sterling continue?

A "double top"  – a very recognisable pattern – is forming in in the US dollar. Dominic Frisby explains what it is, and what it could tell us about st…
3 Aug 2020