The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen 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. 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.
This demonisation of Boohoo makes me wonder if Shadowfall, Simon Cawkwell aka evil knievil, are in cahoots with the likes of Labour Behind the Label, Daily Mail and Sunday Times to demonise Boohoo to get the share price down.
Shadowfall have a big short on Boohoo, brought out their sensationalist and scaremongering report not so long ago, making all sorts of accusations about Boohoo which proved untrue. Then Simon Cawkwell aka evil knievil jumped on the bandwagon saying he'd taken a short out on boohoo. Then the Labour behind the label report which was more pure sensationalism came out last week. Daily Mail jumped onto this. Then the Sunday Times has found one rogue subcontracted supplier. One rogue subcontracted supplier. Something smells very dirty about all this to me and needs to be investigated for any criminal fraud by Shadowfall and Simon Cawkwell aka evil knievil in case they're in cahoots with the media to purposely find something against Boohoo to get the share price down. Something's not right here.
Next and ASOS jump on the bandwagon to make money out of Boohoo when their suppliers are from China, India, Bangladesh, Turkey and you can be sure they don't oversee these factories on a daily basis.
Boohoo have a team of 20 permanently based in Leicester policing factories. Boohoo made one mistake using a supplier who subcontracted to one rogue supplier factory. Boohoo contract 40% of their work in the UK. Next and ASOS don't do that because they make more profit contracting their work outside the UK. Boohoo should be congratulated for contracting 40% of their work in the UK and not demonised for one rogue subcontracted supplier factory.
I remember being told many years ago that all exposure is good even if it's bad exposure because it gets you noticed.
Everyone will know about Boohoo now and will be going to their website to check them out. They may even make more money out of this exposure.
Even without the likes of those that you mention Boohoo seem to be doing a great job themselves of damaging their own reputation. Its hard to fathom that a company of this scale doesn't ask its suppliers if they comply with the modern slavery act which in turn would also trigger questions to so called sub-suppliers.
This point already made. No one will be rushing to buy boohoo products purely because of an association with modern slavery. You can believe that but it’s wrong. SP may well recover but not for that reason.
MJChase - you need to do some proper research on Boohoo.
Boohoo contract their work to suppliers who must pay the minimum wage and take care of their employees safety. This is part of the contract and the strict code of conduct in the contract.
Suppliers can subcontract their Boohoo work out to subcontractors however they must legally give Boohoo the names and details of all subcontractors. They must ensure that all subcontractors pay the minimum wage, keep their employees safe and adhere to Boohoo's strict code of conduct.
This was one supplier who subcontracted their Boohoo work to one rogue supplier factory. Boohoo was not provided with the details of this one rogue subcontracted supplier factory. The supplier who subcontracted the work has behaved illegally. Boohoo will have terminated this one supplier's contract and will no doubt have learnt lessons form this that they will be sure to put into practice for the future.
Next and ASOS contract their work to suppliers outside the UK. Do you think they police their factories or who they subcontract the work to?
I don't just believe that any investor worth his salt will consider all aspects , there is the financial implications , since boohoo may have been purchasing these products from its suppliers at an abnormally lower cost it will indeed no doubt hit profit margins or they will be forced to increase prices either way the fast fashion ethos will die, depending on the outcome of the investigation there is also the possibility of a fine , if they have been found to of broken the law.
MJChase - Please read my post below. You have no idea how contracts and subcontracts work. You need to do some proper research and stop guessing.
I'm well researched thanks , and as you have seen from my posts and I have said it is difficult to fathom why they just simply did not shore up evidence that they have asked their suppliers if they comply with modern day slavery laws. They have not they have produced a statement saying they have a "supplier code of conduct" and because that is not visible how did they align that to the LAW. They may well put better procedures in place in the future and I hope they do , the point is that right now there are a lot of investors losing money, which at present looks like management malpractice , the short term prospects after losing huge retailers is poor and long term is risky.
Next, ASOS and Zalando who contract their work to China, India, Bangladesh, Turkey so they can make more profit. Do you think they oversee these factories?
They're jumping on the bandwagon to make money for themselves.
Boohoo contract 40% of their work in the UK and should be congratulated for this and not demonised for one rogue subcontracted supplier. The majority of those who manufacture clothes for Boohoo in the UK are good, honest people. This was one rogue subcontracted supplier.
https://www.boohooplc.com/sites/boohoo-corp/files/all-documents/boohoo-code-of-conduct-1.pdf
The supplier code of conduct is visible on their website MJChase. Click on the link above, read and learn the truth about Boohoo.
Note that Asos have among their suppliers Cambodia and China. No need to check up on them!!!!!!!!!!
I'm not saying these companies are without sin , they should of also ensured that Boohoo complied with modern day slavery laws which may of triggered boohoo to ensure it was in the contract of its suppliers. My point is boohoo are now in the firing line. I agree they should not be demonised but unfortunately they sell to the public , public opinion matters and the reputation is damaged and it will be cost them
PP - I feel like this is the same conversation as yesterday. You seem to be convinced that there is just one rogue supplier/subcontractor when even Boo themselves are not saying that, they don't appear to know whether there are others. Just because they have a strict code of conduct doesn't mean it is followed. If there is just one rogue and it is a completely isolated case and the ST got "lucky" in finding the one rogue supplier then happy days but i just don't think that is likely.
For what it is worth I am sure Next and (particularly) Asos could easily be selling items that were not manufactured to high ethical standards as well.
There is no evidence that Shadowfall fave an extant short. If you know otherwise where is bit logged.
Great so that's the modern day slavery statement issue out the way , so ethically they just made the mistake of not checking the supplier (based in the UK) to see if they comply. I'm still reserved to that fact an investigation is still outstanding and until that is complete there is still risk.
MJChase - Boohoo are investigating now. The Police and HSE have already been out at factories in Leicester and found nothing illegal at all.
PP - to be fair to you, it is being lightly reported that the police, NCA etc have been visiting premises in Leicester and as yet have found no illegality. But i just don't believe it is one rogue supplier. In addition in the current climate being associated with the word "slavery" whether it is fair or not is just toxic.
I read in the Daily Mail that the HSE had issued an Improvement Notice to one Leicester supplier not clear if it was connected to Boohoo though although under that Story Headline. Unfortunately BOO are in a **** storm here and we need clarity quick smart to arrest this
https://www.fool.co.uk/investing/2020/07/07/boohoo-share-price-crash-is-this-now-a-must-buy/
Click on this link, read and learn. This is one rogue subcontracted supplier. For me, this was a concerted effort by the likes of Shadowfall who have a big short on Boohoo to drive the share price down.
It is criminal fraud to purposely drive a share price down and the NCA need to be investigating Shadowfall and anyone who helped them in this.
The Notice was for Covid 19 violations with regards PPE and sanitiser I hasten to add
Garydav2 - one improvement notice to one factory in Leicester from the Health and Safety Executive (HSE). One.
They can put whatever they want on their website, doesn't mean they adhere by it. A dress sells for £10, from their
accounts , 54% gross margin so cost is £4.60 per dress. I would say it is impossible to manufacture it for £4.60 if the
factories are paying the legal minimum wage. I would say 90% of the factories in Leicester don't pay all their staff the
minimum wage. Also these factories employ machinists that work at home on 'piece work' paying peanuts for the work.
The Kamani family have been involved in the rag trade for over 40 years, they know exactly what is going on these factories.
A good investigative journalist would have a field day writing about their history in the rag trade.
If they are fully exposed no fund manager would touch these shares ever.
occams - what a load of nonsense. Well we know what your personal agenda is. One post on boohoo.
Garydav2 - looks like it wasn't a Boohoo supplier. Boohoo provided PPE and hand sanitisers to all their suppliers.