ONLINE fashion retailer Boohoo has seen its share price plummet after it issued a profit warning.

The company, which started work on a £10 million extension to its Burnley distribution warehouse last month, said it had been forced to downgrade expectations after an autumn High Street discount frenzy.

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The firm’s sales revenue rose by 25 per cent to £50.8m in the four months to December 2014, but still fell well short of expectations.

Its share price fell from 38.25p on Tuesday afternoon to 22.74p yesterday.

Boohoo revealed plans to create 350 new jobs at its Widow Hill Road site at Heasandford Industrial Estate last February. The warehouse currently employs 465 staff in the town.

Work began on a 102,500sq ft square feet extension to the building last month Addressing its latest results, the company said: “We announced in our interim results statement in mid-October that we had managed our marketing spend and growth in the early part of this period, while also delivering the successful implementation of the new warehouse management system and fully responsive website.

“Marketing was then increased to stimulate sales, however, the resultant growth was less than anticipated. We believe this was principally due to heavy promotional activity on the UK high street arising from the warm autumn season.

“Despite the challenging high street trading environment, we had a record week over ‘Black Friday’. The investment made in the warehouse and IT enabled us to execute on handling this peak in gross demand which was 2.4 times our previous busiest day, while maintaining our promise to the customer.

“In light of the prevailing sales momentum in the business, we expect the full year results to be below current market expectations.”

The company said it now expected its full year profit margin, taken in February, to be approximately ten per cent, similar to its results for the first half of the year.

Joint chief executives, Mahmud Kamani and Carol Kane, said: “While the period proved a challenging trading environment, we have still grown the business by 25 per cent, albeit short of our previous expectations.

“We are very confident that we our fashion credentials, pure play online model and the significant investment in infrastructure will continue to drive growth in the UK and internationally.”