Boohoo, the online fashion retailer with an army of 16 to 24-year-old fans, has nearly doubled its profits, helped by paying celebrities and other “influencers” to promote its products on Instagram.

The Manchester-based company, which has turned its founders into multimillionaires, reported on Wednesday that sales had risen by 51% to £295m in the year to the end of February. This pushed the retailer’s pre-tax profit up by 97% to £31m.

Mahmud Kamani, who founded Boohoo alongside the designer and self-described “proper northern lass” Carol Kane in 2006, said 2016 had been a “momentous year” for the company and his family. Its shares, which floated on the Aim market in 2014, have risen by more than 270%, from 50p to 186p, over the past 12 months.

The retailer has a stock market value of £2.1bn, more than Mike Ashley’s Sports Direct at £1.7bn.

The Kamani family owns 38% of the shares, worth more than £800m, while Kane owns 4.5%, worth almost £100m.

Earlier this year, Boohoo expanded by buying fashion website PrettyLittleThing, which was set up by Kamani’s sons Umar, Adam and Samir. The company also boosted its US presence by buying Nasty Gal, founded by the former eBay star seller Sophia Amoruso, for $20m (£15.6m).

Boohoo’s rise has mirrored that of Asos, shares in which have increased from £36 to £56 over the past 12 months, as investors back large online brands. Asos is now valued at £4.7bn, equal to 80% of Marks & Spencer.

Neil Catto, Boohoo’s chief financial officer, said the company’s success with mostly millennial customers had been driven by its focus on encouraging celebrities and bloggers to post about the retailer’s clothes on Instagram.

“We work with a whole spectrum of influencers, celebrities and wannabe bloggers – all people with a presence online – and we work with them so they can spread the word about Boohoo. It goes likes wildfire on Instagram,” he said.

Catto said it was hard to single out any Instagram user as delivering the most sales, but the launch of a plus-size range with the model Jordyn Woods had proved very popular. “It got a lot of buzz as she is friends with the the Kardashians,” he said.

He declined to say how much influential people are paid to promote the company’s clothes on social media, but added that some can be encouraged to help out in return for free samples and pizza. “You can pay people to wear your clothes, or give them free clothes, [but] some are just interested in our fashion and will come along and have a pizza in our offices and put the range on Instagram,” Catto said.

Catto said the company’s target age group was 16 to 24-year-olds, but added that 50% are older than 24, while 10% are under 16.

The retailer plans further expansion in the US, where sales grew by 140% compared with 33% in the UK. Analysts at stockbroker Peel Hunt, who have a buy rating on Boohoo’s shares, upgraded their 2017-18 pre-tax profit forecast to £40m. “With strong trading momentum from autumn/winter likely to have provided a good start to the new season, trading updates are unlikely to disappoint and the medium-term outlook remains encouraging,” they said.

Kamani has vowed to focus on growing the business rather than enjoying his millions. When he cashed in more than £200m of shares in the company’s flotation, his phone rang non-stop, he said. “Someone rang to ask if I wanted to buy a jet. Someone even asked if I wanted to buy a football club. I said to him: ‘Are you on drugs?’,” he said at the time.

Kamani inherited his love of fashion from his father, Abdullah, who sold handbags on market stalls in north-west England after leaving Kenya in the 1960s. Kamani went on to found a successful family textile business, supplying high street names such as New Look and Primark, before focusing on Boohoo.

Asked why the business started in Manchester, he joked: “That’s where the plane landed. London was probably an extra £60.”