We interviewed GraniteShares' CEO Will Rhind from New York, soon after they launched a suite of ETP's which allow you to invest in three different baskets of giant US tech stocks. Watch the full video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East and have access to Premium Chat. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Trading update is May 18th. Croc sales are up 606%!! These are high value shoes so this will be good if they bench mark for the 5 weeks from 12th April against 2019 as clearly they were closed last year.
Considering the hybrid formats as well as the big box stores are selling Crocs, Wranglers skechers etc, Like-for-like sales should be well ahead if they compare against 2019 in my opinion as the value per shoe is a lot higher. Average customer spend must be higher a the last report was most people were buying more than one shoe.
The light pink croc accounts for a quarter of all croc sales and i have just looked on shoezone online and theres only 13 left across all the shoe sizes.
Seriously though - I do like these.
Yes, I have gone through the numbers and previous reports and I still like them. I could be wrong and I'm prepared to be wrong but I would be very surprised if I was wrong.
I know what you mean about sleeping well about a share. I hold a lot of these and I wasn't sleeping well until I bought them. lol.
"Keep it up and you can buy cheaper tomorrow."
I don't want to buy a stock, even if it's free if after buying I am not able to sleep easy.
I can only sleep easy if know facts, numbers, details and so far I have found these elusive in the conversations with other investors on this board.
My biggest investment PFD went to 17.86p on 19th of March 2020, and I was losing half my money
But I was sleeping easy as I knew people are queuing up in the supermarkets to buy it's products
I also knew I when I sleep at night and get up in the morning it will still be earning money and paying of it's expensive debt
As Mr Buffett says it's not worth owning a stock which you are not willing to keep for 10 years, I also add that it's not worth owning a stock you cannot sleep well with.
The amount of knowledge people on this forum have about Shoe, I would not be comfortable with and would not be able to sleep easy with.
Keep it up and you can buy cheaper tomorrow.
"They charge for returns unless they are taken back to the store."
Primark can do this too much has chosen not to as they say there is not enough margin, how can shoe zone have enough margin to collect at store.
Like I said, I am not a blind investor I invest based on numbers, figures, rationale, logic, I don't buy a stock just because it has fallen in price.
Having said that I must tell you I bought a token amount I am still trying to research and not finding any answers from the discussion on the thread. It's more of "oh look all other retail stocks have fallen" "oh this is what someone else is saying" without question anything just blind investing.
Where are you numbers, research, quotation or pin pointing(page numbers) information in annual reports?
I do my research better than most professionals with CFA qualifications.
"He's a very impressive presenter."
I am not into idol worship either, people are just blindly following this speaker without questioning his data and even this guy does not believe in himself with recently changing his mind saying "SHOE might need to raise capital", all this information without any numbers.
He said SHOE will need to raise capital based on what numbers?
It's a very small company with 50% of the shares with the family running it.
It is ignored is what I think.
I do like this though.
Don’t get why this isn’t moving. Most retail back to pre covid levels....
Have you ever thought of being a motivation speaker at all? lol
With respect, you are clearly an intelligent person.
Primark have always stated they are not interested in a digital platform. Nothing to do with profit. However, me personally think that this attitude has to change at some point in the future. I wouldn't rule out a take over of Shoe at some point in the future. Would make a perfect synergy for Primark. Unlikely i know, but not out of the realms of possibility.
Thank you for sharing.
Now let's discuss the points taken in the Video
He claims, "Exiting marginal stores at the end of their lease". So I am guessing exiting marginal stores=
He mentions "Returns rate of 11%" again same as me it's unbelievable compared other retailers so I would like to know how they account for it. maybe they account for returns all the way to warehouse as a return and a return to the store is not counted.
He said "90% of the returns are to their stores" which means I suspect they don't count the cost of returns in their online profits contribution stated in the annual return as it's returned to the stores.
Again he said the same thing as me "10 pound shoe more profit from online with free delivery than in store" how is it that Primark cannot do that and Shoezone can? Even Amazon stopped selling under 5 pounds items and started selling them as addons to existing order i.e. they could not afford delivery costs.
I like rest of the comments i.e. his confidence about the company but I need to understand the above and it's not clear even after watching the video.
Yes thats the one.
He explains the business model PERFECTLY.
I think he starts about 5 minutes in on shoe zone
Crooty - I guess that was the Stephen English presentation?
He's a very impressive presenter.
I was shocked though that recently he sold out of them citing the fact that he thought that they should raise money. The BOD said they didn't need to. Stephen did say that he still thought the management here is in the top 10% though!
Are you for real?
Just before lockdown there was a business guru that posted a 50 minute video about retail businesses. There was a 6 minute presentation on shoe zone on it. It basically said that its MORE profitable to sell shoes online than in stores. I will try and dig the link out. Its on here somewhere on this thread i think...!
"Cherry on top is, we have a good online offering now so it will all add to the profits!!"
I don't think Online offering is profitable. It it is then perhaps they would have closed all the stores by now as they have just 2 years average lease times. Don't get deceived by x million profit contribution statement it's not a profit figure, so you don't know what costs have been attributed to the figure. If the mighty Primark are unable to make online profitable then I doubt Shoezone can. Most online grocery is unprofitable and ASOS/Boohoo put together are unable to make a fraction of profit of Next plc.
Sales are vanity and profits are sanity.
I am confident we will see 125p in next 2-3 months, we are a unique proposition on the high street and as people get out and about, they will buy new footwear. Cherry on top is, we have a good online offering now so it will all add to the profits!!
Well if anyone is wondering how Shoe zone has done this week, this is from the Wiltshire times.
Well, this is from the Wiltshire times:
Around the corner, Naomi Kalgerou, manager of Shoe Zone, said: "We've had lots of customers coming in. We even had people queuing outside and have taken double today's sales target.
"Many people have been coming in for new school shoes and trainers and we've sold an awful lot of slippers and sandals.
"It seems like people have been waiting for us to reopen."
Trowbridge: 100% up on their sales target!!!
Hopefully this is nationwide. They have also converted Hull and Huntingdon this week into the new Concept format. The recent report in the FT says the retail parks parks are fairing better so hopefully they hare going great guns too...
Here is the link for the wiltshire times:
Kallumama & TBTT I think your observations are valid but I just don't think we're going to see this continued acceptance of free delivery for online items with so many people abusing this and ordering 5 items to keep just one. This is especially true for bulky, low cost items like kids shoes. I've said before that the entire high street will have to be decimated before in person shopping for £10 kids shoes is not the primary sales channel. I'm happy to wait 24mths to see this return to 125-150p if necessary ... I have very few places where I believe I will confidently double my money in under 2yrs ... this is one to just leave alone and let management do their thing
All comments are good but I don't think you can accurately make those assumptions without real rental figures.
It makes complete sense to me to stop rollout of more stores. We are/were in a pandemic with the shops closed!
The shoes are cheap - wasn't it a 63% operating margin?
I can imagine that returns are low because people don't want to queue up somewhere to return for the sub £10.
2019 and before for many years the company has been profitable with no debt. Are you saying this business model has significantly changed or was a deception?
" The parallel with Brantano is apt"
I don't fully agree that comparison with Brantano is a perfect apples to apples comparison as they did not have online which provides and even wider range than Big Box.
Their online returns look suspiciously low, maybe they account for returns all the way to warehouse as a return and a return to the store is not counted. I don't know, it seems impossible to get 11% returns in shoes when you cannot touch, feel, smell and try on the sizes. Clarks stores pay so much attention on kids shoes sizes so how come consumers buying online from Shoezone have no worries at all about the bought items?
Sadly, I think your analysis is correct. The parallel with Brantano is apt.
I say sadly, as I've made good money with ShoeZone in the past. But all good things come to an end.
" Online presence plus big box stores"
Seems like you haven't read the last update from the company
Please go https://www.shoezone.com/Investors/Investors/Financial-Information/Results-and-Presentations
Click on 8th March 2021 Annual report page 4 has the following statement "The rollout of big box stores has been suspended for the foreseeable future due to the financial pressure caused by COVID-19."
Now on the same page you will find "When all our stores reopen we will have 427 stores (52 big box"
Extrapolate this data 52 big box stores = 11% of the number of stores
Note that Shoe zone does not publish square footage of the stores(unlike ABF/Primark)
But let's assume sq footage of a typical Big Box is 4 times that of high street stores.
This means % of total sq ft allocated to Big Box stores will be 35%
Let's assume the Big Box stores have a 30% discount per sq ft for being big(volume discount by a landlord)
The cost of 52 Big Box stores is 25% of total cost of stores.
Now let's look at how much the Big Box stores bring for the 25% stores spend.
Page 4 again states "The big box stores have increased by 9 to a total of 51 stores. Revenue was £17.1m"
Let's hypothetically bump up the Revenues by 10% to assume the stores freshly opened (9) were allowed to operate along
with other Big Box for the full year
So 25% costs brought in 19m out of £122.6m or 15.5% of the revenue
So now you are seeing the reason why they chose not to expand the Big Box format anymore as it's a drain on the cash even though they claim majority of the costs for capex in Big Box are provided by landlords subsidizing rents for the first one year.
You claim "High volume low costs"
The volumes are not showing in the numbers above nor in managements actions "holding off on Big Box expansion"
"Its a great model for the future"
It's a model that has been tried unsuccessfully by Brantano before which went bankrupt.
Anyone has any clue about shortcomings in my research above? Are the assumptions correct, do they have more information to rectify the assumptions?
I would also love some feedback to understand how you feel online model of buying £5 shoe with free delivery and free returns is a profitable one? If the mighty Primark cannot afford the model in the same discount clothing or apparel segment, how can Shoe Zone afford it?
Their returns figure of online at 11% seems to extraordinarily low compared to other online operators. Why do you think people return shoe zone shoes less than other online clothing operators? My experience of ordering shoes from amazon over the pandemic was that I ordered 10 pairs from Amazon over the pandemic and returned 8. The reason was that I wanted to try out two different brands and both varying sizes for both me and my son.
We answered you earlier.
Its very simple really, How does BOOHOO make money? Online presence plus big box stores, Great model, I'm not interested in little corner shops. High volume low costs . Its a great model for the future.
I'll be having a top up today.
“ I'm a 3-5 year investo”
Can you please share some due diligence?
How will this company make money with almost half the number of shops than before?