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BBC news:
https://www.bbc.co.uk/news/business-58593582
Retail sales fall but online retail sales share increased
“the share of online sales increased to 27.7% in August from 27.1% in July, substantially higher than the 19.7% share seen in February 2020 before the pandemic.
The ONS said a survey analysing retail supply chains found 6.5% of all retail businesses said they were not able to get the materials, goods or services needed from within the UK in the last two weeks.”
wonder what Kallu's thoughts will be on this one - he'll still spin it that Primark are in the box seat, yet they are not online :)
Should see good growth in ASOS & BOO next 4 weeks backed by this & travel without tests - ASOS could deliver 50% gains & BOO 30%
Why would asos do better ?
Because they've been hammered more lately?
May take longer for sentiment to change for asos .
Here's my prediction for them both: up, then down, then up again. This may also be followed by a possible 'down', but DYOR.
We should ask danl90 for his considered view , everyone seems you're plebs don't attempt to answer ??
I'll happily answer but only after rag tells us!
This board reminds me of this scene in 300
https://www.youtube.com/watch?v=gI6sARmxEuc
Loads of potters, sculptures and blacksmiths all have great insight into how to value a share
Valuing shares to any great accuracy is beyond many well paid analyst's let alone blacksmiths , too many metrics that are corrupted by shorters , options , naked options etc. Just look at the Archeos debacle .
That's why their targets are broad guides. They aren't exact as that's impossible given you aren't buying the business on a set day unlike in a private transaction where you acquire the whole share capital (ie you can clearly calculate and agree a price and it will execute)
But rag should be find to do the broad brush analysis here as he's declared both an "absolute steal" so he's clearly calculated huge upside even if using a wide estimate
Curious to see where he lands on this one
Hardly complicated is it. Net of cash the current market value of 3 billion is around 22 times after tax 2022 earnings. This is a small premium relative to the market given Boohoo's growth. The fact it's undervalued given its growth is almost trivial given how obvious it is, the question is will Boohoo fix the issues that have got us to this valuation.
The argument of competition from Shein doesn't hold much water to me. The fact Shein is so successful should bolster investors understanding of the secular trend happening right in front of us, and there's room for more than Shein. Contrary to a certain comedian on this board, the cost to buy the data moat Boohoo enjoy is a big barrier to entry and something Primark have reiterated time and time again. The high street will always have luxury shopping, but the number of general retail stores is only going to continue to shrink. The 30% increase in online shopping since pre-pandemic will never be reversed, and will only increase over time. There's 1st mover advantages here and just like many other sectors there is going to be a lot of consolidation happening.
Shein and Boohoo are both competing with each other of course, but the real story is that they taking market share from incumbents, and given Boohoo's size relative to the fashion market, it has a long runway ahead of it.
Won't be long before investors see 200 million after tax earnings on the not so distant horizon and realise this valuation is wrong by some margin, but investors are right to be nervous about Boohoo scandals and Esg concerns. At some point Shein will have to be held to the same standard. I think it's positive all this is coming out, it'll force Boohoo to change and they will be stronger on the other side. If you are speculating over short periods, you deserve the poor results your going to get, but I've no worries that this valuation is a great entry point for the long term if you believe the current issues will be resolved.
On another note I've never seen someone with such level of conformation bias as Kallu. It's comedy. I don't know if anyone missed it but when asked why Primark had performed so poorly over the last 5 Years and his reply was "I think people have felt guilty about buying more clothes" haha.
As for him outperforming fund managers, it's both very unlikely given how foolish his posts are (anyone can get lucky though), but regardless he doesn't run the same level of money. Running millions is much different from running a few hundreds thousand.
Oh and as for "Primark dont put out excuses", well you'll see in the below link that this is also just a bit of cognitive dissonance from Kallu. It's not the only time they've said it either.
https://www.standard.co.uk/business/primark-blames-unseasonable-weather-for-decline-in-sales-a3982196.html
The point isn't if it's hard or not the point is if Rag can tell us!
Bear in mind he wanted Boohoo to have a "more normal p/e" (I get accused of taking stuff out of context and this quote is from Oct-20 and I don't think he ever knew what a p/e ratio is
Also you mention data. In what sense is this the same type of data insight that Topshop enjoyed when they were on the high street?
No, companies like Boohoo can shape their offering far more efficiently and have far more insights into their customers than anything we've seen before, and they will only get better at it.
Whoever manages their data best wins. Imagine an Amazon warehouse on the edge of 10 different cities across the world, each one containing perfectly selected inventory, seasonally adjusted for those specific geographic locations and customers, all of which can be delivered within 1 day, and often same day. It's hard to enter in against that once someone has done it. There is a first mover advantage which increases with scale.
Would you rather log in to your account and see things curated that fit your style, perfect for the season, delivered nextday at the price point and quality you tend to buy at, and over time that perfectly fits. Alternatively you can elbow your way through the city centre after you've paid £6 parking with no guarantees you can even find what your looking for and where 90% of everything on the shelves is not relevant to your needs. Don't look at where boohoo is now, rather imagine what this level of data driven insight will allow 10 years from now. I'm not saying boohoo will 100% win the game, but I'm pretty sure I know who won't. If your best defence against all this is an email address list and £1 bath bombs, you may struggle a bit.
We already live in a world where it's quicker to have a mcdonalds delivered than go to the restaurant. It's only just started. Luxury shopping will remain on the high street sure, You don't order a 10k Rolex online, and same with a good quality restaurant. They are selling experiences, they need the bricks and mortar. Consolidation is coming. City centre retail is only going to decline, it remains to be seen how more local stores perform.
It'll be nice, city centres will likely become hubs of more experiences and culture and high end shopping.
The point I'm trying to make is that I'm not sure it's even possible to fully comprehend how big data will change things. Its probably over hyped in areas, but it's an obvious advantage in others.
Even just simply speed to market is an advantage, and at boohoo it's completely driven by big data.
Rag would say you're wrong! He's 30 years experience and knows the guys from Pennywise
Topshop trialing a dress in 300 stores is just the same as boohoo's version of test and repeat
What about spotting trends? This is still only possible from being on the ground in a location? Ie there's no way a business in China could know trends in LA?
But let's give rag time to tell us the answers now. Or is he waiting for PMoran to pop in to defend him and tell me off?
Haha. Well speed is the difference. And it's not marginal either. Its horse and cart vs a jet plane.
Think about the trend insights from millions of social media interactions, not to mention the fact boohoo pay the influences that set these trends.
You tie all this together and the idea of the £1 bath bomb being a competitive advantage seems..... well hilarious. Which it is.
Jjoo
Couldn't agree more, places like Hudson Yard and Coal Drops Yard are great examples, retail needs to be about the narrative and it needs to inspire because the experience really matters, at the mo it sadly lacking, just about every major H St in the UK looks tired and generic.
What I mean by they pay the influencers is that along with the social media data they are so close to the trend influences, and with molly mae even weaving the target demographic directly into the fabric of boohoo. That can only be a smart thing to do and mirrors what athletes have been doing with Nike etc for decades.
Agree with that rag. Everywhere looks the same. If they want to even slow the online trend they are going to have to improve the experience.
How viable is that in terms of costs outside of the luxury market? Does anyone buying socks actually want an experience, or just cost effective and efficient?
Biggest swerve ever ladies and gentleman!
Come on P get rag to play fair! Happy calling me out well get him to back up the ramping. It's the same as Kallu just the opposite direction
@J finally someone who "gets it"
I haven't followed the beef on here so I don't know what's going on. Just to float that out there. It's only the absolute drivel from Kallu making my brain melt that got me commenting in the first place haha
ha basically rag thinks boohoo is a "ragtrade" business ie it's just about making the stuff look good and it flys off the shelf.
It also doesn't matter how you do it ie online, stores, wholesale etc just get it sold
He also dispute that a "platform" and "data" are real and they are just buzz words. Topshop had the same insight and speed via stores
Rag also think Boohoo has had huge success with the brands it has bought just by making micro chnages ie just taking better pics on the website. Not much else
Oh and he think test and repeat (which boohoo does) is foolish and shouldn't be done
So long and short he hates the company and everything you've said above is wrong
Oh, but he's "invested" and thinks the stocks going higher!
It's the opposite of Kallu
Coal Drops is an experience, i agree it has little relevance outside the luxury market and of course as you say who would pay £6 for parking to go shopping to buy a pair of pants or socks when we all know you can browse thousands of colours on line. I guess my point is that to make the major H Streets attractive once more you need a version of CDY in order to make them relevant once more, we have gone from niche independents making town centres desirable to multiples then piling into them and saturating these centres, forcing the indie out, to then in many cases the Multiples moving to out of the town centres and leaving them to the charity shops and discounters, bereft of any experience and the Town Centre being a shadow of its former self. We may see our kids kids think it's a novelty to actually go to a store and try stuff on!! it's a long way off (if it ever comes) but the likes of Coal Drop should be an inspiration of what can be achieved albeit on a much smaller scale, anything is better than the current major H St and i include Oxford St in this.