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Thanks Danl90, going to use it sparingly for a yearish and then probably sell, Did you go in the DB10 ! only 2 made i think, would not want to stick one of those into the gravel@ 2.5m One thing that never ceases to amaze me is the speed that track drivers actually go, you sit in car next to them and think this guys going way too fast for the corner but the car sticks and around the bend you go, nice experience Danl90. The Vantage and the DBS Superleggera, In No Time to Die, hopefully we will get to see last this summer, at last !!. Tom Hardy, Michael Fassbender or Idris Elba in that order for me to replace DC.
You'll have to post some pictures for us
Only had a handful of experiences with Aston but one was pretty special. The launch of Spectre I got invited down to a "launch day" at the MK site and the stunt man from the film drove us around in a "barely" road legal track car (around MK so a lot of straights, round about, straight, round about, straight) but that was fun
Enjoy the car
Rag - “cars are my thing, life’s too short, do stuff whilst you still can and live life to the full, no way of knowing what’s round the corner.”...... I have no problem with cars being your thing your choice of car or the general live it now approach but dude if there was ever a time when you really do need to have half a clue as to what’s round the corner it’s when you get behind the wheel of that beast when it turns up!! Will you be letting the rugby player have a go behind the wheel?
Thanks PP , Cars are my thing, arrives late June , if L/D and the knock on effects have taught me one thing its lifes too short to not enjoy the fruits of your labour, no way of knowing whats around the corner, do stuff whilst you still can and live life to the full, thats my view anyway.
ragtrade - wow that's some car, enjoy it as I'm sure you will,
i'll put the tape measures in the post....
Oh come on Daman Sachs don't be like that, your share chat has become as stagnant as the BH share. So Cars, my 5k deposit is down on a F1 Vantage, i know i said id let some other mug take the hit on depreciation and get A Mclaren GT or DB11 even stretch to a low mileage DBS , but then the new F1 pace car comes out and Aston bring a Vantage F1 Track car out and im smitten, i cud just spin it and bank 10k ish but feels wrong. What your thougths fella ?
Let’s hope you’ve a better understanding of rugby then you do of boohoo
If you want your shares to be worth a lot less then rag is your man!
Sorry just been out for a quick 4 miler. Errr yes Daman, i think so. Apparently there a RNS or something re a warehouse this week , did u see it ? That cheeky fu**k*r PG got his 50m back, he's a bugger, probably bought BH shares with it, lol.
Im off to rugger training with my big tall lad, catch up laterz, id like to talk cars with you again.
Also other bits I’ve posted are that boohoo won’t sell third party clothes through market place. I didn’t need to post these 25 quotes it was purely for the fact you don’t understand the RNS or think the Ceo during an hour long update was just lying
I think the best bit was when you said you won’t find it written anywhere! And then yeah it’s in the RNS
Rag you’ve said this in Oct and you said it again recently. You want third party clothing sales! You want boohoo to do huge amounts of whole sale
Why are you denying these?
I make my points over and over and then I cut and paste bits to support my individual points. Ie like when you said the “platform was just a website” I gave you a quote from ten ceos of next, asos and boohoo to prove you wrong. You just can’t accept that your world has passed
No my comments and what you couldn’t pick up on the other week when I gave you 20 chances is you have to look at forecast expectations. This is what your small world of being a little factory supplier doesn’t understand
- boo do third party clothing sales = lower GM% the stock will fall
- boo do wholesale in a material capacity = lower GM% the stock falls
You think this is all about flinging a rag out to get a quick £. You’ve shown you don’t understand how to generate value. You obsesses over the small details (like camera) as thats the £4billion value in asos or boohoo. You don’t understand the big picture or value
Why own the shares if you hate how the business is run? If management are running the business wrong why invest? That’s literally insane!
And the biggest cut n past person on here is the D Sachs boy, its what he does,the only tbing he can do is quote reports , a retrospective view, come the next BH statement he'll be all over this board like a rash, this is guy who worshiped this share like a God , then sold on way down due to fleagare, panicked, bought in again , then cra**ed himself and yet again sold on way down due to USAgate, Dan Napoleon Sachs the accountant with Balls of Butter, lol, lol.
Danman , Napolean, Sachs, your fascination to keep cherry picking ny quotes on here knows no bounds, thou doth protest too much.
Your posting is irrelevant to this board, only looking backwards, zero knowledge of here now and only being able to analyse reports of performance just gone, which is why you sold on the way down , twice, off the back of fleas and usagate, priceless, so no point in any dedate with you especially given your Napoleon Complex.
PP im sure you now u/s Daman Sachs irrelevance to this board , dont engage it what he wants.
People the issue is is your copy and paste stuff you clearly do t understand yourself. Sometimes stuff you post disproves your own points
Like the above you have posted is where @rag wants to take asos ie bring in third party clothing sales “no brainer” I think he says
Also this article picks up on boo’s test and repeat and how asos’s version of see what happens through third party brands is slower. Again rag in Oct thought the asos way was better when in reality it leaves you weeks behind. It’s because he actually doesn’t understand boohoo’s value drivers
Also people there some points in the article below that are just wrong or silly. But I bet you couldn’t pull them out as again it’s copy and paste with no real understanding
It seems there may be people on here who don't want you to learn and prefer to keep you in the dark.
It is only by reading everything you can find on Boohoo that you will have the confidence to hold Boohoo shares through every up and down.
Hence why I cut and paste everything I read about Boohoo to share it with everyone on here. If you don't want to read it, then please don't.
Subscription is only £2 a month and for me, well worth it.
Well worth reading in full my previous three cut and paste posts.
This is how we learn by cutting and pasting information like this on here.
continued further .......
4. Low own-brand sales
This lack of niche isn’t helped by a low input of its own brand revenues. Asos makes roughly 28% of revenues from its own Asos brands vs the vast majority of its own supply for Boohoo. Now we all know the risks that are present in owning your product supply chain, especially if you have poor governance in place, however, by relying on branded retail products for +70% of revenues, you begin to see why profit margins are of lower quality at Asos. By commanding own-brand sales, retailers benefit from higher margins and better relationships with customers. By tailoring products faster to new trends, own-brand retailers like Boohoo can outpace competitors who are waiting for their wholesale supply chain to pick up on the trend.
Asos has made improvements here in recent years, and the purchase of Topshop was likely to improve Asos’ footing in this department.
JD does rely on key brands Nike and Adidas to a large extent. However, JD is a value-add retailer — its sought after urban locations (such as the new flagship store in Times Square, New York) are locations where Nike and Adidas would want to show off their latest collections to a high volume audience. It is this value add process that gets JD sports named specifically by Nike as a preferred retailer in conference calls, and it is why I am less concerned about JD's reliance on big brands.
An in-depth look at the financials can help explain some of the aforementioned points. Whilst growth has been pretty punchy over the years, the two missteps in 2015 and 2019 show that a low growth year every once in a while can be expected and is partly the reason behind such a volatile share price. Gross margins are solid at around 50% but the key quality metric of operating margin remains low at <5%. Asos has been fairly leveraged in recent years, with a debt to equity ratio above 1.5 for the majority of the last 5 years — however, with good top-line growth, leverage is probably worth having. The recent Topshop acquisition has added significantly more assets to the balance sheet, thus reducing Asos' return on capital employed (ROCE) from a previously impressive 20% down to 13%. This likely means the acquisition hasn’t been immediately accretive to profits, however, in the long run, I would expect the purchase to pay off.
In summary, there are lots of reasons to like Asos — the growth story looks set to continue and returns have been magnificent for long term holders. However, there are a few specific reasons I prefer Asos’ peers for exposure to the fashion market as mentioned above. There could be more volatility in future, and I will be revisiting the Asos story if signs of margin improvement or a significant share price decline ensue.
The Twenties Trader does not own shares in Asos.
Further competitive pressure on the fashion retail marketplace is the increasing threat of key brand suppliers looking to increase their DTC (direct to customer) sales, which have better margins. Pretty much every clothing brand’s conference call I listen to — whether that be Nike, Adidas or a recent call in Levi’s Q1 results — the second hot topic on the agenda after sustainability is increasing DTC sales and reducing wholesale retail (the sale of products to third-party retailers).
In my mind, the switch to online has changed the game in retail. Previously, a strong argument for owning clothing retailers (in a brick and mortar setting) was the comparison effect — shoppers liked to view a brand or product next to other potential product choices to help aid the decision-making process. This worked well in a physical store, as a multi-brand retailer can have many different brands listed next to each other so the shopper can make a comparison. Switching to online, if, for instance, I am evaluating my next purchase of a pair of jeans, I can load five pages from each of my favourite brands and visit their online stores to compare products. Thus, in an economic sense, the cost of comparison is minimal in the online setting vs bricks and mortar. With the shift to online ever increasing, I think the DTC model of key brands is only going to grow from here, thus putting further pressure on multi-brand retailers to compete for the business of key suppliers.
Lastly, further competitive pressure on the online-only retail space is the advent of an entirely new product category that has spun up over the last few years, sustainable retail, such as the online second-hand clothes shops Vinted, Poshmark, Vestiaire Collective and Thrift. With Asos’ core customer base of millennial 20 somethings, a (typically) climate change and sustainability-conscious demographic, I would expect challenges to be seen looking to future growth.
3. Lack of Niche
To me, the Asos business model lacks a specific niche. Asos’ sales are spanned across all apparel lines, accessories and footwear, and even though its mission is to be ‘the #1 destination for fashion-loving 20-somethings worldwide’ I am not sure Asos’ is discernable to any specific age category or customer type. By catering to a broader market, it increases the scope and scale of Asos’ business. However, Asos’ product lines are far more general than both JD and Boohoo. JD caters to a cash-rich, resilient, ‘sneakerhead’ market, where teens see JD and other retail sites such as ‘Size?’ and ‘Footpatrol’ as the place to go for the coolest footwear. Boohoo appeals strongly to the younger teen market, with a niche for Instagram style influencer wear. To me, Asos has a much more general basket of customers, which can lead to less loyalty, as they are easier to influence to spend money elsewhere.
Asos is a company I really struggle to judge, and the market clearly does too. Since 2010, the Asos share price has crashed over 50% in three separate instances, each time rallying by more than 300%. I can’t imagine what this rollercoaster has been like to ride for long term holders, but if they have managed to hold on, they will likely be quite happy with the result to date. Asos continues to grow into its UK, European and US markets and has recently acquired Topshop and other assets salvaged from the break up of Phillip Green’s empire. Whether Topshop can be integrated into Asos effectively or just gets wound down, I still think it is a smart move, as Topshop in the hands of a competitive owner or private equity would have diverted sales away from Asos’ business.
I own both JD Sports and Boohoo in my personal portfolio, and I like the fashion market, especially for the more digitally engaged operators. However, I don’t own a position in Asos for these four reasons.
1. Growth / Profit mix
My first issue with Asos is that it doesn’t seem to be growing that fast. I say ‘that’ in a light-hearted fashion, as a four year average of 23.6% is very good growth, and much faster than the wider market. However, looking at UK peers JD and Boohoo, Asos hasn’t quite performed in line in growth terms. Some of JD’s growth is arguably attributable to their recent acquisitions of retailers to increase their global footprint. However, Asos’ growth hasn’t been solely organic either.
I can understand buying a slower growth business if profits are more significant, in essence, you trade off some growth to receive a more cash generative business. However, Asos’ operating margins are pretty woeful. An average of 3.5% in the last 4 years is not good and is under half the level of Boohoo and JD, peers that are growing much faster than Asos. You may argue Asos is at an early stage in its growth story, however, Boohoo is not only smaller, but also younger in its growth story than Asos, and yet manages double the operating margins.
Even as investors in growth companies, profits still matter, and operating margins are a strong precursor to how likely the business will be able to reinvest capital for future growth.
2. Competitive Pressure
The second factor that influences my preference for other companies would be the competitive pressure that Asos faces. The online fashion marketplace is fierce. Well capitalised global peers in the online-only retail space such as Zalando in Europe, Fashion Nova and Revolve in the US and Boohoo in the UK fight for market share with more traditional retailers such as Debenhams and Selfridges in their local markets. They also fight a resilient core of low to mid-tier brick and mortar apparel companies such as Next, Zara and H&M.