Member Info for alex1621

I can understand why Ashley wants Debenhams. He could build the marketplace to rival Next and re establish Debenhams on the High St, in all of those malls he is buying up. But there is also the possibility that he could incorporate the young fashion brands in that format, so that the operation becomes bricks and clicks.

The question is can he afford to undertake a cash takeover, and would he have to use debt to do so?

I don’t think he would risk that but it is not inconceivable that he would offer Frasers stock in a merger proposition?

It will be interesting to watch this play out.

I suspect that Ashley's financing offer would have come with strings attached, a couple of board seats at least. The Kamani's have taken worse terms to try and keep Ashley on the outside. But that is not possible when he is holding a 27% stake in the business. We are in for an interesting few months as this plays out. Kamani's looking for technical errors in the EGM requisition to justify rejecting it, but I'd guess Ashley hasn't made that mistake and it will go ahead.

If I knew how to vote (nominee accounts) I would support the motion.

Https://frasers-cms.netlify.app/assets/files/financials/openletter.pdf

Someone posted a link below. Go down to posts after 7:00AM today. Just work backwards.

Appears to me that Ashley has the whip hand here as I can't see other large shareholders siding with the Kamani's, nor do I think they will get much support from retail shareholders.

But as many of us are nominee holders. How do we get to vote at the EGM?

Not sure what Ashley's strategy is here.

Is it about gaining Debenhams and offloading the fashion brands to Shein at a profit? Or is he genuinely interested in keeping the group together and turning the business around as a whole? One possibility is to turn Debenhams into a bricks and clicks operation, which would go down well with the general public, who I get the impression quite liked Debenhams on the high street. He has a lot of retail space and he is adding more.

Will be interesting to see how those shorting react? Interesting times.

My understanding is that you have to make an offer to all shareholders if you exceed 30% of the shareholding?

I don’t think that is what Ashley is proposing. He wants control but not a takeover.

In any case it looks like matters are coming to a head. Kamani has had time to turn this around and has failed. From the Frasers letter it suggests that their were cheaper funding deals on the table, but they chose the poorer one.

The directors must respond within 21 days and the meeting must be held within 28 days.

Looks like Revolution Beauty part 2, this time with the Kamani’s on the receiving end. If it unlocks value then I’m supportive of it. My Ashley/Shein theory might come to fruition.

The key is to bring the cost base to a level that is consistent with the revenue generated, and simultaneously bring the debt level to an amount that is insignificant ... and that means asset sales. A recovery is not impossible, we've already seen signs of recovery with ASOS and N Brown, and both appear to be further ahead than Boohoo at this stage. So I think there is still time to turn things around. However, I wonder if an outside interest will intervene and pick up the operation before that happens ... Shein would be my best guess and I think Ashley's stake is too high for the Kamani's to have the final word. The Mulberry situation is different because the Ong family stake is over 50%. Ashley is not the shot caller, but he might well be in this case.

Boohoo expanded off the back of a surge in sales during the pandemic, believing that sales would only increase further and therefore investing in capacity made perfect sense. I don't recall many analysts criticising them at this time? However, in hindsight, it would have been better to hoard cash and see how sales play out once all the competitors are back up and running after the pandemic.

Ashley will not make an offer for the company, he is looking to profit from a recovery in the SP or a takeover by another group, and failing that he wants to be in a position to pick up assets cheaply if the recovery/takeover fails to materialise. If any offer came from him it would be 10% above whatever the current price is. I suspect he wants to offload at a nice profit to Shein and do a deal with them to buy Debenhams, and perhaps Karen Millen. To be fair he could do more with Debenhams because he could turn it into a bricks and clicks retailer. He’s buying up a lot of retail real estate and he will need retail brands to populate these malls.

All guesswork and speculation on my part of course, but if we don’t see signs of recovery things should come to a head in 2025. But Ashley is no white knight.

Bfd, I don’t understand the mechanics of that. I’m trying to understand who is doing what and for what reason?

How can a company with a short position that wants to exit do so whilst ratcheting down the SP? That company would have to be a buyer in the market, not a seller. And the impact of large buys is a SP rise.

No one has yet to offer an explanation for that? Does it involve working with market makers? Because if they drop the price and are forced to buy triggered stop losses only to sell to a shorter I’m not sure how they profit from that?

Explain “walked down”? You mean market makers trying to trigger stop losses because they have a large buyer on the sidelines and not enough stock? That makes a little sense.

What doesn’t make sense is a company who is already short using algos to drive the SP down so that it can exit a position? I don’t understand how that works? Because instead of buying back they are selling more?

Anyone care to explain?

I’m not that familiar with algo sales, but I don’t quite understand how Eleva could be ratcheting the SP down whilst buying back shares to exit or lower their short position?

Does anyone care to explain?

Ashley is no white knight, he is quite the opposite. He’s publicly stated that he doesn’t care about shareholders (Sports Direct) and you can be sure he doesn’t care about Boohoo shareholders either. So I hope that if Debenhams goes on the block there are other suitors. Next have already established a successful marketplace and there may be other interested parties. Let’s hope we are not at the mercy of Ashley.

I think the Boohoo story will come to a head sometime in 2025. If there is no indication of trading recovery through the Christmas period then the piecemeal sale of assets will begin.

I’m guessing of course, but the return of Umar suggests they are trying to refocus us on their area of expertise, which is youth fashion. That suggests that Debenhams, Karen Millen and non core fashion brands will be for sale. The sale of the London property would go a long way to reducing debt so I’m not of the opinion that a brand sales will necessarily be fire sales. They have time.

I’m watching events at Shein closely. Post IPO I wouldn’t be surprised if they made a move for the group. It would give them a plug and play operation, which helps should the de minimis tax advantage be eliminated. They could buy for pocket change and offload Debenhams to their mate Ashley. For them it would be pocket change.

If there is a sale of Debenhams I hope that Next are interested buyers.

When did Ashley ever pay a fair price for an asset? Any offer that Ashley would make would be derisory. My understanding is that he lost Debenhams because he made an offer that was accepted and then tried to lower it further at the last minute … only to watch the Kamani’s step in and buy it from under his nose.

The SP will move north only when there are clear signs of stability and the much awaited return to growth ... otherwise the SP will remain subdued. The only factor outside of that is takeover rumours or an announcement of talks with a bidder.

The Umar Kamani appointment is not confirmed, just speculation. If he comes back focused and motivated it might be a good move, but my impression of him in recent years is someone who has been distracted by outside interests, celebrities and public image. But he is at least young and savvy enough to understand the customer base of the young fashion brands.

Would also fit with the idea that Debenhams and Karen Millen are for sale. But I’m also wary of them taking the company private and stiffing retail shareholders once the balance sheet has stabilised.