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Danl90 lets leave it fella if you dont belive i work in supply whats the point, for the record again 2 weeks Turkey is as i mentioned eatlier 1 week max cmt and packing 1 week by road to UK DC.
This is my last mail on subject havent got a clue what your trying to prove.
The point I am trying to make which is what I was saying from the start is that boohoo deserves a multiple more akin to Gymshark! The multiple is how a business’s earnings are valued and the quality of those earnings.
What makes boo’s quality of earnings better than Asos is
1) the margin we capture as all own brand
2) the rate of growth we achieve
3) being a brand gives defensible position (if you want PLT you have to buy from Boo
Asos doesn’t hit any of those three as well as boo or gym shark hence why I was saying we should look to Gymshark for where our multiple should be!
So you turn in two weeks in the U.K.? So turkey turn in two weeks also but what about the week of travel you refer to? Has that been omitted now?
Amazon no I’m not saying fast fashion I’m talking about the reseller element! I was literally so clear on that how did you misunderstand. Amazon can sell a Northface coat quicker or as quick as asos. This puts 66% of asos business at risk. Not saying asos will lose but it is at risk and there is no defence asos can have to this. While you quote revenue figures Morgan Stanley and Wells Fargo but amazon clothing sales at $30billion for 2019! That’s x10 Asos! You ability to be diligent is awful
Asos own brand. Yeah it’s 33% of the business and I gave you the figures from the annual results 2019 £1bln of sales. 2020 £1bln of own brand sales. It DIDN’T GROW! That means the 20% growth Asos saw last year was reseller brands! That’s a clear sign of 1,2 and 3 not being hit!
I know you work in supply (questionable as you keep deciding to miss out parts - in an earlier comment you say turkey can hit two week if the clothes are ready bagged and washed so yeah two weeks if we miss out the production bit this time! Ha) but I’m helping you understand valuation and multiples and Asos 33% own brand with 0 growth is not appealing! Amazon and it’s reseller offering will only gain traction. Why not get your northface jacket same day rather than next on your amazon prime!
@danl90 what's your point , what are you trying to conclude?
1) I say Asos turn orders around in 2 weeks if they need to, actually planning is really sharp honed over many years so in reality they only do it when required. You say they cant. I actually make for them, not in Turkey, and we turn stuff in under two weeks, i know Turkey do same because we all follow same template for approvals on a critical path to enable us to hit the deadlines of shipping matrix's and i have given you and explained how already. If you don't believe it then no worries, you can drag a horse to water but you can't make it drink.
2)Amazon =Fast Fashion nuff said, again as explained nothing going on here
3)Asos own buy, you don't get it, this is their own brand verses the many others, total of other adds up to more in total but Asos own brand takes more than any other Brand on there by a country mile and none performing Brands are dropped in favour of newer and up and coming, its not the other way round as you have suggested.
So to conclude, as i'm losing the will to live, Asos T/O fy 20 =3.26 m Boo Hoo T/O fy 20=1.23
If your saying B/H better than Asos then i refer you to above, if your saying B/H turn more styles around in 2 weeks than Asos fine , thats because they have no choice , up till now there business model is based on this to keep the revenue flowing but its caused a hole heap of s*** that you just keep ignoring. If your saying B/H in a few years time will overtake Asos then i would say if the latest events go their way then its def possible, but it wont be because of crappy quality 2 week turn around from Leics which is actually fundamentally flawed, if it wasn't the bloody share price would have already hit £5, so if they bag TM/TS yes then they nail that other demographic that i keep banging on about that you again just dismiss because they are not into that Garage, Fendi Flexing, Glamgirl Gucci wearing rip off glasses look.
Start getting excited about what might happen with Arcadia Group because its a game changer and stop looking at one trick poney Gucci Girl who gets a crappy dress in 2 weeks, it's unsustainable and won't make up the 2 billion plus that they are still shy of to catch up Asos anytime soon , however if B/H bag PG's Golden Goose then they may actually start to challenge Asos very very quickly.
I'm done,
Ragtrade excellent analysis of the contenders. We did a lot with Arcadia in the past, but around the time GG moved over to PMK we decided to avoid. I hope you get through the leftover inventory ok.
Let the battles commence!
@ragtrade how is my knowledge of Asos plucked from thin air when I have supported I have said with links to third party sources (initially an FT article, then a JP Morgan note and then a industry paper). You are the one who are saying Asos can turn things around (if you count the part from when the clothes are made). You haven't provided any evidence of how asos can turn it around in two week from an on screen design in the UK particularly as you yourself say it takes a week transport from Turkey so actually it is you who is plucking the two week idea from thin air and aren't able to support it or explain how they do the first part in only a week
The point re Amazon is certainly true and Asos numbers reflect that. Asos last year posted a 20% rise in revenue and Amazon can stock all of the c.850 reseller brands. Over time this will become a drag for Asos as all of these 850 brands will have Amazon stores and Amazon bundle clothes with other items. Amzon own clothing might not be worthwhile but the third party brands leaves 66% of Asos business exposed
In terms of Asos own brands the 2019 annual statements show sales of +£1bln (pg 23) the 2020 annual accounts show sales of "over £1bln" (page 13). So it hardly feels like (as you claim) they are ahead of trend and pumping the items out when boohoo own lines grew +40%. Yes some of Asos "new" accounts grew in rather exciting percentage terms but they were off low bases so the %'s flatter. In total though the sum movement of Asos own brand was sort of pedestrian
Above are statements and facts not plucked from the air. So try and respond with some (finally) when you make your point
superb post Ragrade extremely informative and sets out the battle lines clearly!!!
@Hillsy I'm not sure that many people on here appreciate how big this is for B/H and Asos.
Arcadia wholesale brands on Asos are big players. We actually supply TS/TM, beginning of the year they were actually fighting back but Covid has destroyed them, we had started to pull back from them, today we were due the last of our debt, doubt we will see it and we are sitting on quite a bit of inventory for SS21 but i'm sure we can off load at cost at some point so whilst damaged it's nothing terminal, in fairness its a bit of relief its come to a head.
The out come of this as you say will be VERY INTERESTING, contenders.
No1 Boohoo there were rumours before all this that they were in discussions, JL knows PG very well.
No2 Mike Ashley , Arcadia have stocked Debenhams and Ashley is desperate to get his hands on Debs and add to Fraser Grp
No 3 JD and Peter Gowgill in a battle for Debsb with Mike Ashley, for JD get TM/TS would be a real coup
No4 Asos they will be looking over there shoulder at this, they stock alot of the Arcadia Brands and they are very good for them. If B/H bags TM/TS then this launches them head on to do serious battle with Asos as the demo graphic for TM/TS is pretty much in line with Asos own brand, will Asos let this happen, there is cross fertilization from B/N to Asos to Arcadia, many of the people at Asos worked at Arcadia as did JL so they all know the value of the TM/TS Brands
No 5 Amazon rank o/s but again i heard rumours a month back that Arcadia was trying to do a deal with them.
I fear for Burtons, DP's, Evans, Wallis as for Miss Selfridge , they are pretty much on line only now, this could be another great Brand for B/H to nab as it's more in line with the current Demographic albeit less in your face.
So we are set for a battle royal, lots at stake, biggest change in the fashion industry in a lifetime and BH could could be set to capitalise big time.
Ragtrade, the Arcadia story going to get very interesting for sure! Bidding war between JL and GG?...
dan190 Dude lets leave it , your knowledge about Asos is plucked from god knows where and is simply not correct and yet again you have ignored all my other points.
Quote "Amazon can blow Asos out of the water" LoL they have been trying for years the guy who is heading it up worked for Arcadia then Primark and has been trying to position it compete for the last few years but has not even come close, have you seen there offer!!!! as we have been debating it's really not that easy, simple to bring stuff in and sell but to design and deliver to the demographic we are talking about and be on point al the time is another ball game.
HOWEVER GIVEN TODAY BIG NEWS RE ARCADIA THIS IS A SIESMIC CHANGE
If BH manage to secure then this is a massive game changer, if you look back on my posts from week or so you will see i mentioned about them possibly putting in bid as Arcadia is in distress, this opens up the demographic i was talking about. Topman/Topshop are the biggest Brand on Asos, far bigger than BH btw, they also have a large growing wholesale business around the world and JL knows Arcadia very very well, if they secure these Brands then they will start to move towards threatening Asos as the no1 fashion e-tailer in the UK but there is going to be one hell of a battle for these two Brands , possibly Amazon might even enter the fray!!!
Asos go from design on a computer to delivery in two weeks and a week of that is transportation? You're just wrong is all I'm saying. Even more you have to factor in your monitoring of the third party brand trends that they have sold - that alone could be 4 weeks before you spot the trend or have reasonable sum of data to conclude its a trend by that point a chunk of your customers have already bought the low margin third party altenative so Asos losses out
https://fashionunited.uk/news/fashion/boohoo-asos-missguided-pave-the-way-for-ultrafast-fashion/2017052424625#:~:text=According%20to%20the%20report%2C%20Boohoo,most%20traditional%20fashion%20retailers%20follow.
Here is analysis from 2017 showing Asos average is 6 weeks and Boo is 2. Given Asos have further left Leicester you can say the skew has shifted further to high end
Asos isn't an aggregator it is reseller. Aggregator means you collect and own the brands they sell they do not own Ralph Lauren or The North Face. Boohoo is an aggregator of brands as we acquire brands and only sell those
My points are 1) being a reseller isn't good it's bad as
- lower margin on third party products
- you miss the opportunity to sell your own higher margin goods
- brands can drop you
- Amazon can blow you out of the water
2) shorter lead times and being the fashion trend mean Boohoo are out of gate a lot faster than Asos so we win sales
Both of these refer to my initial point that Gymshark is a better comparator for this business
danl90 you can def disregard some of what JP Morgan say, whilst they are an investment Bank they are not a Clothing Manufacturer that supplies the demographic,
I set out clearly the dynamics of both B/H and Asos, majority of which you ignored instead you are fixating on a quick turn around which as i have explained Asos are already achieving on sealed blocks, clearly from what you have written below you do not understand these processes, from design to delivery i will say again, Asos are achieving two weeks, if your friend is on speaking terms with SP @ Asos (she will know who i mean) he will confirm that they are delivering in 2 weeks from COMPLIANT Factories out of Turkey.
As i mentioned Asos is an aggregator and i again will re iterate this, whose biggest Brand by far is their own Brand, as you quite rightly pointed out other Brands may sell more collectively but Asos's own Brand is the biggest most successful Brand on their site, having an insight into how each of these other Brands perform on their site is a massive massive benefit.
I'm really not sure what point you are trying to make, the fact that B/H relied on Leics so heavily has been shown to be flawed concept, which is one of the main reason they bought in Andrew Reaney, to give them more of a dynamic COMPLIANT wider sourcing base, so whilst you can keep banging on about lead times the actual small qty and crap remnant fabrics that B/H PLT used enabled them to do this, however, this has caused a whole heap of pain that is still being felt , Kamani has to now go before the EAC to give evidence and has dragged AR along to hold his hand. All that said they are a maturing company, through planning they can and will expand their supply base and make it TOTALLY COMPLIANT, as i have also laid out they need to broaden there appeal and not just shout out to GlamGirl that she can have this chavvy top tomorrow for 5 quid because actually it is unsustainable. Asos is a far more mature business, this is shown in the figures and the compliance and the broad offer of own buy and Brands. B/H will get there, i do think prices will have to slowly inch up but that's no bad thing, they have the right people to move this business forward. Like i say not sure what you trying to actually achieve ?
I don't know her exact title only what it is now and the position was similar - i thought you claim not to be about the semantics?
So let me understand you point it can come here in two weeks if the garment is ready sealed and washed ie made? That's not the full story and misunderstands the test and repeat model. The two week extension JP Morgan is talking about is starting the clock at inception ie a drawing on a computer and go! I could claim PLT have a lead time of 3 minutes if I ignore the process and just count the time it takes the driver to walk down from the gates.
Boohoo are two weeks quicker at present all in and you have to be considering all in when you do own brand as you have to design it, source the material etc.
@dan190 your friend is head of supply chain mmmm , so not head of sourcing or Director of Sourcing ?
2 week turaround is possible on up to about 3000pcs depending on size of factory.
Garment must be already sealed, all lab dips or print already approved , fabric on floor in stock , all trims and labelling approved and again in stock, if garment is washed depenfing on wash 1 week tricky but still doable, most of B/H garments not washed.
B/H qtys btw far smaller than Asos so for say a 500pc order for Asos this can be made and packed in 2 days again depending on size of factory , 1 week to UK by truck.
@Ragtrade you work in the clothing supply industry? Can you help me understand how you think "Asos can turn goods around in 1 week from Turkey and 1 week by road" when JP Morgan state
"Boohoo has already demonstrated its ability to roll out “test & repeat” internationally with the majority of its sourcing (60%) now coming from overseas. If it were to shift the remaining UK portion to an international supplier base we think the cost benefit (c.140 [basis points] of gross margin) would likely offset any incremental clearance drag from (slightly) slower lead times (c.2 weeks). We see short term disruption as the biggest risk of a sourcing shift”
So Boohoo moving to Turkey would add two weeks but you think Asos can do it in two weeks? So at present are Boohoo manufacturing in a day?!
As mentioned my colleague is the ex Head of Supply Chain at Asos and stated they are about two week behind Boohoo but they weighed that against being in Leicester. Can you help me understand how Asos now do this or did you just make up two weeks?
@Pmoran LoL yep perhaps i was a bit harsh in my u/s that she didn't have the ability to obtain a real one.
@Hillsy I'd be shocked if they don't import already from Turkey, Andrew Reaney has a list as long as his arm of Compliant Manufacturers , me being one of them!!! point i was making was to danl90 who said Asos can;t turn orders quick enough, they can from Turkey but i suspect the probably do pay more, of course the supply chain for B/H will change for the good i'm not knocking them, it just takes time but at least they have now appointed credible inspection agencies. I'm a long term investor and when i saw JL bring in AR i new that they were serious about sorting out issues. I'm more concerned about them broadening there appeal, yes they have bought in other brands, not exciting ones old ones, i'd be more excited if they bought in an up and coming Gymshark, this is where the really clever spot is. I'm sure if they run the Brands they have away from Cheshire set of North with separate buying teams then they will do ok but would be much more impressed if they had bought someone who is around the bend that is away from there current appeal, i keep banging on about it but check out Lucy and Yak, polar opposite to B/H, not suggesting they would even u/s them but it's a Brand that's becoming well known and gaining traction ticking all the boxes inc current fixation with gender, one for the future. B/H are going places just not sure how far and some way to reach Asos.
Buff....people say what they want these days - whether there is any fact in what they say or not... good that they have another gapped filled in their otherwise sparse compliance focus but dont imagine this will silence anyone out there wanting to grab their 15 minutes of fame will slander or libel etc etc
Ragtrade I agree with most of what you say, however don’t underestimate the ability of some young garage glam girl coming out of moss side to nip to the Trafford centre and nick the real deal Gucci from selfridges!
Ragtrade, I agree with much of what you say, however don't underestimate B/H ability to source from TKY in the manner that ASOS do. JL is bringing in a team of ex Primark seniors and between him and them the necessary supply base connections are very much in place. In terms of broadening the appeal isn't that the point of buying and developing the other brands, Karen Millen, Coast etc?
danl90 Not sure it's worth clogging up the board with this but for what its worth.
Firstly i don't want you to think this is not about one being better than the other they both have their place but Asos is over 2.5 times the turnover of B/H @ 3.26m.
They are poles apart in terms of target audience, very interesting you consider Asos not as on trend (vanilla), you would rarely see a Balenciaga and Gucci garment on a trend board for for Asos however the opposite for B/H anything brash in yer face, flexing, is a given. Some young Garage Glamgirl coming out of Moss Side who is all over YT wearing a rip off Gucci sweat maybe on trend in the North West but that doesn't meant to say it's on trend across the Country. Asos can turn goods around in 1 week from Turkey and 1 week by road, no duty, price point bit higher but compliant ethically and socially from a very well planned supply chain honed over the years that JL would give his right arm for. Most of Gen Z walk a middle road on fashion, Asos offers both sides of the road and the middle, you cannot dismiss them the way you do, they appeal to all parts of the country, towny and indie demographic. B/H and co are def more Northern based, the same Demo that Juice Corp came from, which at the time was much lauded, B/H has an opportunity to get to the heights of Asos and it def has the right CEO now but it will need to broaden it's appeal from wanna be flexers bleating on about Fendi/ Balenciaga and Gucci because most of the country just thinks its Chavvy as f*** , if however they manage to broaden their appeal then skys the limit.
Being a former judge anyone with an axe to grind will have to have conviction in accusing BOO from now on.
Just need good sentiment about results and £3.90 to £4 on the build up to results.
go on tell us where I'm misguided we are supposed to help each other after all
Boo follow high end fashion trends not the middle of the road. Asos now have trying to follow but due to overseas supply chain they follow at a slower pace
Go on tell me which of Asos's brands is the real trend setter! And even if it is the point remains that people are buying that trend brand over Asos own
Danl90 think we will leave it there, i'm at the coal face of supply to most of the Brands mentioned on here and whilst I won't dismiss all of what you say a lot of it is wrong or Miss Guided!
When you are 66% reseller you're a reseller shall we put a line under this there?
Selling other brands isn't a strength as it pulls away from your own brands (hence why they only sell 33% own brand and are trying to push this up) further to the FT article before it is a concern of analysts that Asos have such dependence on third party brands
In terms of your view that it gives Asos an edge in spotting trends is again misunderstanding fashion. The trends come from the high end brands such as Balenciaga and Gucci etc and then we copy. Boo have the advantage here as using leicester gives us a two week lead time advantage over asos (my college is a the previous head of supply chain at Asos and admits not using Leicester made speed a disadvantage for Asos). Furthermore what Boo and PLT have done have actually become fashion ie through influencer collections or celebs wearing gucci and plt at the same time.
Of Asos' c.850 distractions none of them are particularly at the forefront of fashion but just rather nice middle of the road clothes serving the vanilla. Boo sets trends and I see your point here that this could fade but we copy faster than anyone else also. Additionally a lot of boohoo and PLT product is now without branding on it so that makes it more staple fashion for longevity
Lmeng 10 JUST HIT £3.00 Buy on CMC Markets immediately sold off