There is a powerful new club in the north-west of England but its most bankable players are probably unfamiliar, despite raking in hundreds of millions of pounds a year from fans.

Meet Boohoo, PrettyLittleThing and Missguided, the Manchester-based online companies threatening to take over fashion retailing with inexpensive, brash clothes that are more likely to have been inspired by a reality TV star’s clubbing outfit than the catwalk.

Last week, Boohoo bought a controlling stake in PrettyLittleThing, the startup founded by the sons of Boohoo’s co-founder, Mahmud Kamani. With PrettyLittleThing valued at only £5m thanks to an option clause dating back to Boohoo’s flotation prospectus in 2014, the deal was as much of a bargain for shareholders as the £8 clingy dresses its shoppers love.

“The deal provides Boohoo with a complementary brand at a really attractive valuation,” says Phil Adams, chief executive of GCA Altium, who advised Boohoo. The purchase gives Boohoo shareholders – who have seen the value of their holdings quadruple this year – a slice of one of the fastest-growing young fashion brands in the UK at the moment.

The driving force behind PrettyLittleThing is 28-year-old Umar Kamani, who started the brand with his brothers in 2012. Sales surged 400% to £17m in the 12 months to end of February 2016 as its target market of teenagers and twentysomethings snapped up edgy fashions created with so-called “influencers” like Lionel Richie’s 18-year-old model daughter, Sofia. Sales are expected to ratchet up by another 150% this year.

Online fashion aimed at young women is currently the sweet spot in a tough fashion market, because low prices keep wardrobe updates within reach of even the tightest budgets.

“The teenage wallet has its limitations,” explains Boohoo’s joint chief executive, Carol Kane. “We don’t have a high returns rate: our shoppers don’t want to tie up their money. If they are spending £20 on a dress they won’t spend £40 ordering two sizes. They don’t have that kind of money. It is quite different to the middle market.”

Kane adds that key to PrettyLittleThing’s success is the age of the founders: “Umar is from the same generation as his customers.” That means he knows his peers are glued permanently to their phones, scrolling through social networks. They want to be able to flick through a digital wardrobe packed with thousands of bodycon dresses, jumpsuits and thigh-high boots while they are at the bus stop, thinking about what they are going to wear on their next night out.

She describes the Boohoo brand, which has a broader clothing offering, as “more inclusive” than its younger, sister brand. “The Pretty Little Thing shopper is sassy, glamorous and body confident,” she says. “I would definitely say she is confident.”

While this wave of digital fashion businesses, which includes rivals such as Missguided and Public Desire, look like overnight success stories, they have generations of experience to draw on as the founders are typically scions of successful clothing importers based in the region. Mahmud Kamani’s father Abdullah, who escaped war-torn Kenya in the 60s to start a new life in England, started out selling handbags on a market stall but went on to become a successful high street clothing supplier. The family reaped £240m from the IPO in 2014.

“Online fashion retailers don’t have the legacy of stores to worry about,” says Boohoo chairman Peter Williams. “If they get traction with customers, as both Boohoo and Pretty Little Thing has done, they can grow very quickly.”

“Being able to source great product at a sensible price has been one of Boohoo’s great strengths,” he adds. “Celebrity trends can be interpreted very quickly and the stock turns [over] at a fantastic rate ... it’s a very dynamic model.”

Missguided is another Manchester-based brand enjoying breakneck growth. In the year to March, its chief executive, Nitin Passi, says sales increased by a third to £117m, and that the business is currently enjoying growth of more than 60%. Profits were down, though, as it invested in a new headquarters in Salford Quays and warehousing, and went on a hiring spree, recruiting 336 head office staff in the last 18 months.

“This enables us to scale the business,” explains Passi. “We are going after growth in the UK and internationally.”

Passi, whose father is a successful clothing supplier, started the site in 2009 when he was in his mid-20s. Rather than describe its model as “fast fashion”, he prefers “rapid fashion”, as 300 lines land on the site every week and it has the ability to get a new design on sale within 10 days. Missguided has recently opened its first store in London with plans to open more around the country in 2017.

He insists the business is not built on his family connections, as their expertise is in dressing a different demographic. “I borrowed £50,000 from my dad in 2009 and paid him back in 2010,” he says. Missguided is based in Manchester mainly because Passi’s uncle offered him free office space at the back of one of his factories to get started.

Missguided has sought to differentiate itself from rivals with edgy branding that includes the promise to “create killer garms for the dreamers, believers and night lovers”.

“A lot of retailers were playing it quite safe so we decided to be a bit more real in the way we spoke to our customers,” says Passi. The 34-year-old entrepreneur agrees competition is hotting up but adds: “In the zero to £20m [sales bracket] there are a lot of players, but above £50m not so many. We focus on the customer, not the competition.”

Manchester’s fashion stars are burning bright at the moment but Williams adds a cautionary note: “The internet means if a brand has momentum it can grow very quickly. Obviously you don’t hear about the ones that don’t make it.”

THE GEN Z EFFECT

You’ll have seen the billboards. Usually on the tube or side of a bus, usually featuring diverse models wearing something revealing, sheer and sparkly, and usually with the price writ large on the poster. You might not have bought anything from Boohoo or Missguided or Pretty Little Thing, but that’s because they’re not for you. These brands are for Generation Z. Cheap, disposable, ethically dubious and arbitrarily named, this new wave of online-only retailers mark a shift in how we’re shopping and what we’re buying, and prove that superfast fashion is only getting faster.

Their success comes down a series of tactics. The Missguided site uses terms like “sick” and “fire” alongside expletives and puns that speak to a very specific Snapchatting age-group. It also features Amina Blue, fashion’s current It model (she’s 5’1”, mixed race, and has appeared on the Kanye West’s Yeezy catwalk). Boohoo, meanwhile, has Sofia Richie (daughter of Lionel, famous for being photographed with Justin Bieber) as its campaign star. Both models speak to post-Instagram girls.

Is this merely a triumph of marketing over clothes? Not likely. Shopping has morphed from a high-street industry based on accessibility and affordability to an increasingly online model which encourages risk and whim. These clothes are so cheap you can afford to risk buying them without trying them.

Ever-increasing prices at Topshop have created a gap in the market for cheaper newcomers. This used to be Asos, and arguably still is, but the online retailer that is the largest in the UK has also inspired smaller, cheaper, younger versions in a similar mould. What they do is different to, say, Topshop or Zara, because the clothes are geared towards millennials and Generation Z, and also because they’re less catwalk-led and more inspired by the red carpet.

If we’re buying online it’s because we’re time-poor and we want a quick solution, whether it’s a last-minute party or something deeper and psychological, and these brands fill that hole.

So if there’s no term for the opposite of “investment purchase”, we need to come up with one, because these brands are taking over.
Morwenna Ferrier