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Just how far will the Government want to open this can of worms? Liecester has been Labour run for years yet there have been no factory inspections by any of the authorities ?? Its all smoke and mirrors. Probably all being instigated by Shadowfall?
ZZTP - investing easy? lol, all I seem to do lately is pick wrong uns ;(
Boohoo is reaping the benefit of a huge shift in customer behaviour brought about by the coronavirus pandemic that will have a permanent impact.
This will be the largest channel shift to online retail in the history of the internet,. The longer this backdrop goes on, the more entrenched this shift in consumer behaviour will be.
Consumers online shopping dramatically increased as the lockdown forced the closure of non-essential physical shops and remain elevated even as the high street reopened.
People will just be nervous about going to a physical store. The second thing that entrenches that permanent change in consumer behaviour is, what is going to happen to our high street.
Going into the pandemic, about a third of all physical stores in the UK were loss-making. Those stores therefore weren’t particularly viable anyway and just as a consequence of the pandemic and the restrictions many of those stores will never reopen.
The Global Fashion Market is worth £2,000bn. UK is £71bn, USA is £330bn, Europe is £350bn and rest of the world is £1250bn.
Boohoo plans to become the biggest global ecommerce retailer for clothes and it will get there. Boohoo's revenue for year ending 29 February 2020 was £1.2bn so it has plenty to go at.
Boohoo has nine brands, Boohoo, BoohooMan, Prettylittlething, Nasty Gal, MissPap, Karen Millen, Coast, Oasis and Warehouse. Boohoo is excellent at buying brands from administration and turning them round within 2 years. For example, Boohoo bought Nasty Gal for £20m and turned it into £100m revenue within 2 years.
Boohoo have come back with an extremely robust response to the totally sensationalist report. Read the response in full in my posts below.
Boohoo's revenue went from £100m in 2014 to £1.2bn for year ending 29 February 2020. Boohoo Group have 9 brands now and will buy more brands out of administration. Boohoo bought Nasty Gal, a USA brand, for £20m and turned it into £100m revenue within 2 years.
Boohoo have a great team, Mahmud Kamani has been in the clothes industry all his working life, the same for Carol Kane who was also the clothes designer. Mahmud Kamani and Carol Kane have worked together for years and years; long before the startup of Boohoo. John Lyttle has global experience of running and growing Primark. Neil Catto, Finance Director has done a great job with Boohoo. Umar Kamani has grown Prettylittlething to nearly £600m revenue in 5 years.
Each of the 9 brands have their own management and design teams. Loads has been learnt by Mahmud Kamani and Carol Kane not only in the 6 years from listing Boohoo but all the years prior to the start of Boohoo. Each brand uses the Boohoo Group tried and tested method to see what sells or not. Each brand uses social media to its best. Each brand uses celebrity endorsements, vloggers, tv, ads, i.e. whatever is needed to grow the brand effectively.
The Boohoo Group makes more profit than ASOS because the Boohoo Group designs the clothes for each of the 9 brands and has them manufactured. ASOS sells clothes on behalf of others so their profits are much less than the Boohoo Group. ASOS have made mistakes, like opening a warehouse in the USA which failed for them. The Boohoo Group are very careful and prudent at what they do.
Boohoo can and will achieve their goal of becoming the biggest online global retailer for clothes. Boohoo will become the Amazon for clothes.
Buy Boohoo shares and tuck them away in an ISA, Sipp for at least 10 years, if possible, 20 years and more. Then sit back and watch them grow. There will be ups and downs. No shares go up in a straight line. Hold the shares through every up and down and they will come back higher and stronger.
ZZtp - Suggest if you want to get into Boohoo you get in now before you miss out on a great growth share. The negative news is total sensationalism. The High St opening up won't affect Boohoo. Read my previous posts on Boohoo then you'll understand. Research is the key to making money on shares. Trading shares like Boohoo might make you thousands. Holding shares like Boohoo makes you a million.
Response to Labour Behind the Label Report from Boohoo - continued ....
In addition to our on- going in-house audit programme, we have invested heavily in a bespoke third party led compliance programme with compliance specialists who audit all suppliers on both an announced and unannounced basis. Our UK compliance programme requires all suppliers to disclose their sub- contractors, so that they are included in our audit programme, something, which is verified by our third party auditors, so any suggestions of unauthorised subcontracting, is again not true. The vast majority of our top 40 suppliers also received a Sedex audit in the 18 months prior to the onset of Covid-19. We do not of course; claim that everything is perfect all of the time, what business could and this is the purpose of our UK compliance programme, to support suppliers to continually drive up standards and support UK manufacturing.
• Last year we introduced industry leading 14-day payment terms for all UK manufacturers to ensure that they have reliable and constant cash flow so that they can act responsibly towards their people and their suppliers. We know from speaking with suppliers direct how important this has been, particularly during the recent period where many retailers have cancelled orders without full payment.
• As a business, we have invested heavily to ensure that we meet and exceed the guidance relating to self-isolation, social distancing and hygiene standards to ensure that every boohoo workplace is as risk free as possible. We therefore do not condone any supplier that disregards the very clear guidance on dealing with those affected by Covid-19 and we will immediately look into the claims made in this report, together with our third party compliance partner.
The boohoo business model is highly efficient, meaning we keep unnecessary overheads to a minimum. We do not have an expensive bricks and mortar retail estate, we do not rely on costly TV advertising, instead we use social media to connect with our customers. Whilst other retailers may have to order hundreds of thousands of a garment to fill their retail sites, we may only order 10’s or 100’s. We test how it sells and if our customers like it we re-order, therefore unlike many traditional retailers we do not have to carry thousands of pounds stock, which may or may not sell, which is great for us and great for our suppliers, less unused stock, less waste and more economically viable.
All of this means that we are able to invest in the areas that really matter: our people, our designs, our customer service and our suppliers and is why we are able to offer products at competitive prices.
Response to Labour Behind the Label report from Boohoo
The boohoo group categorically does not tolerate any incidence of non-compliance especially in relation to the treatment of workers within our supply chain and we have terminated relationships with suppliers where evidence of non-compliance with our strict code of conduct is found. It may surprise people to know that we applaud any examination of practices in supply chains, because we share similar aims: that everyone employed is fairly treated and properly remunerated for the work that they do. However, for any work of this nature to have credibility and to be of value it needs to be accurate and factually correct, which the Labour Behind the Label report unfortunately, is not.
• Since the onset of the coronavirus, we have significantly changed how we operate our business to ensure that we have closely followed and adhered to all aspects of the guidance provided by the UK Government to keep everyone in our business safe and well. At no point has this guidance required any on-line business or factory to close. It is therefore wrong to suggest that we were flouting the rules by continuing to trade before the 22nd April 2020.
• During the first few weeks of lockdown, where guidance meant that we were unable to complete on- site compliance visits, our buyers, in-house compliance team, senior team and CEO were in constant contact with our suppliers. This included using video and audio calls and constant reiteration of our expectations on social distancing and hygiene measures. Additionally we made available sufficient amounts of PPE and hygiene products free of charge to any supplier that needed them to ensure that these were available for their teams, so there is no reason that these would not be available. As soon as lockdown restrictions were eased, our compliance team and third party compliance specialists immediately resumed on-site auditing.
• Boohoo does source some of its products from the UK but this is around 40%, a fact that we have shared with Labour Behind the Label, so we do not understand why this report states that this is 60- 70% this is simply not true. Without accurate information on every retailer’s orders across the range of suppliers in Leicester we would not be able to estimate the % of volume that our business accounts for, a suggestion that this is around 80% can therefore be no more than guess work.
• We do not have an exclusive relationship with any supplier in our supply chain and to suggest that we do because our auditing process is less of a burden is not true. We are committed to supporting UK manufacturing, which makes a considerable contribution to the UK economy and has many environmental benefits, but we do not do this at the expense of standards.