Member Info for danl90

@rag you're right I have tried to be more civil

After all we are here to help each other and there is a lot of what you say that i do learn from

@Mudis

I agree. I touted Gymshark as a better comparison for boo vs asos (I was told I don’t know what I’m talking about), I voiced concerns about Tik Tok the second most popular app for US teens (I was told I don’t know what I’m talking about), I tried to mention possibly the boohoo brand was weak and US distribution more valuable longer term than Topshop (I was told I don’t know what I’m talking about), I tried to justify why I’d sell boo over the next 3-5 year (or £5 which ever sooner) as the market would flatten with increased competition and would create margin pressure (I was told I don’t know what I’m talking about)

Turns out quite a lot of these points I made have been the big ticket items out of the last update and now everyone seems concerned on the margin! Some who mocked me for saying sell at £5 now saying they will sell in the summer!

PLT is similar to Gymshark people love the aspiration of Umar and the collabs (they smashed this last year) but this didn’t work with boohoo the wolf cindy edit was all still on the rack after 3/4 weeks

More brands does mean you aren’t leveraging advertising spend I fully agree. And that was my whole point around Shein. They have a brand that appeals to all (similar to Primark I think - it’s been many high end or middle class shoppers secret) so yeah why not repurpose boohoo? Long term that’s the right strategy but atm I’m short term thinking so yeah get topshop. Boo’s “new in” is just like a copy of PLT

Also with more and more brands you run the risk of cannibalising rather than growing (but I imagine we are a bit off from that)

@mudis - don’t! Honestly you’ll be murdered on here

I got shot for saying boo wasn’t doing well at tik tok. Please please please don’t start with twitch :)

@P I like the idea of some bloke called Ken, part time milk man, has day traded himself up to 20% of boohoo

Can someone ask Rag why he thinks Boo will have margin pressure? Just last week he was arguing that I was "85% wrong" and this was the topic of debate

One week later , one RNS and a tonne of investors all voicing concerns on the margin and he now see "margin pressure"

What changed in the week? Or was I right on this one?

Not meaning to start a argument here I'm genuinely curious what changed his view (as a man in the business). Also he said to people he was now selling in the summer after he said i didn't understand fashion for wanting to sell at £5. So I'd be curious to understand what has evolved

Not an argument - a point for us all to learn

@taverham I don’t think that true in this case as people aren’t buying equity so debt isn’t considered. In boo case we are buying a pure asset ie the brand

The EV to equity consideration is when you’re buying the equity so you’d need to consider cash and debt

https://www.retailgazette.co.uk/blog/2021/01/next-in-pole-position-to-buy-arcadia-group-from-administration/

This article hinting that next will be asking landlords to change the rents to turnover model. This is similar to new look if memory serves?

Next will run the online via their platform which is like a mini version of the hut ingenuity platform (or in my basic head)

Come on boohoo!

https://www.entrepreneur.com/article/363315

Bershka and Pull & Bear their biggest markets are Spain and China

Does show that there is so much more boo can achieve. Europe still has tonnes of growth, China - wow! Southern America - wow!

Would be great if Topshop was popular in any of these places? Does anyone know? but we could really smash the world over

@aim4 I agree and I tried to sufficiently caveat that some of my memory here was hazy. My vague recollection was that the order is just the order for distribution but you have to treat the views of all creditors equally hence why I’m thinking you can structure to get the best outcome for all even if that includes side deals etc

Just to step back. Bloody awful for the pension holders! Sometimes it’s easy to forget the real world fall out so part of my is a bit happy this process looks competitive

@everyone you’re not reading what I’m saying so management are saying Jan-21 and Feb-21 negative (basic maff points thread). Management are then saying we are still confident of 25% growth next year

But the analysts are saying “well at the moment you’re in negative growth, lockdowns could still be here until June, there’s no big holiday or reason to buy clothes before then so when you do your Q1 update will that show the 25% growth you’re telling me? Sceptically they all agree no

Hence the share price falling from 370p to 338p

@people I know what you’re saying but you’re not being objective if we are in negative growth now and next month where will the big 25% growth in Q1 come from? Analyst are questioning what management are saying

@aim4 but this might help them get more. As the pension fund then comes out of that pot.

So the liabilities reduce by £350m

I’m not saying I know the ins and outs but if the numbers stacked it’s an option also you could have creditors sign waivers to claims.

I was just trying to make the point but ok “it was a strong hint at a profit warning for Q1 next year”

That better?

@people read my post to angle the profit warning isn’t now it’s next year POTENTIALLY. Boo has to do 25% yoy growth. If we start next year we 2-3 months of negative or flat growth it means that expected level of growth is a bigger mountain to climb. You’re looking at the wrong period of time. Markets are forward looking and the forward looking view is a POTENTIAL profit warning

@Aim4 that’s true. But if a bidder knew taking on or committing to contributions was the difference to winning this can be done. You can do whatever deal you like and the admins weight it up in respect of all creditors

@angle so get up the RNS and the 10months to date revenue is up 40%. Full year guidance for the two months less to go is 36-38% so to go from 40% growth to 38% growth the rate of growth must be negative (that’s maffs)

Boo’s growth expectations are 25% growth yoy but at the moment we are hinting at negative growth. So as I said there is potential for a profit warning in Q1 if the rate of growth doesn’t return

Hope that explains it for you but it’s really quite easy maffs

@people he did. And an analysts squarely ask him this question but fact is the numbers are baking in negative growth. I said in a diff post we now need to be hoping boo blows 38% away as sales don’t fall off a cliff

It’s a shame management didn’t raise guidance to 40% as I think this would have helped

The JD point from rag is very true but JD has just done a huge US deal and investors didn’t react well to that. Would they want to rock the boat again so soon?

@keep I think we need to be clear here the results update wasn’t good. It was a profit warning. 10m growth is 40-42% yet management expectation for the the year is only 38% so they are admitting we are in negative growth for at least the next two months (given we are half way through Jan this must be what they are actually seeing)

If the current trading doesn’t improve (my view is it will in sunmer as vaccines and holidays) then boo will issue a real profit warning in Q1 next year

Let’s all be very clear on that

@akhtar but at x40 multiple dividend investors won’t pay near that so you’d have shares worth a lot less

If boo ever admit growth is slowing the p/e will fall inline with other retailers so c. 20 - 25 so you really want dividends to be 10-15 years away

@people you could well be right but the pension could be relaxed about structured payments given next and US PE have deep pockets and great track records of running stores (I’m just playing devil’s advocate) as trying to say this isn’t a straight forward of who lumps up the most cash on day 1

Also I think topshop and topman have to be bought together. I was thinking about this and chatted to a friend about it (he’s a boo investor) and the brands are too closely linked

I couldn’t feel comfortable buying one and then letting someone else control the other. Ie if someone bought topshop and tried to make it up market but someone bout topman and turned it into crap and was then done for slave workers or something. Every news article would still say “topman, used to be part of topshop” or for the people who don’t read papers would just think they are the same - countless people still think rolls Royce make cars and don’t know it’s BMW

Just a thought

@keep I fully agree that’s my “long term” strategy. But given last week and the profit warning (in disguise) I think we need to do this to put the stock value back up

@akhtar if boo paid dividends our share price would collapse. At the moment our “equity story” is we are growth, growth and growth. So are positioning is is that we are holding the cash for big growth. Paying dividends is sort of admitting that “we see no need for the cash so you can have it” also at x40 multiple a payout ratio of 50% FCF (which is far more than we could afford given capex required) the yield would be like less than 1%

@rag I agree and in my rambling above I think a scenario might be that they promise contributions. Where as a boo bid might get x in the £1. A structured set of payments over a decade from running profitable stores could be higher. But then this has risk (would you really want your pension that went to 0 because of stores at the hands of stores again?)

It’s all very interesting but given last week I’m fully geared for a deal

Sorry peeps that link doesn’t work. But I think (and this is a vague memory) but leases rank in the admin at full value of the rent not collected. Ie if it’s £10k a year lease over 10 years and there is 6 years left the landlord sits as a creditor for £60k but then if they take on a new tenant their claim falls or falls away (but I’m really rattling the brain here so could be wrong)

This is why the landlord bit is interested as although someone might bit less this could result in a bigger net amount to creditors as landlords waive their claim as they are happy to accept a new owner rolling the current stores. But then if the bidder was to say “we’d take stores but want a 30% haircut on rents” the landlords might say swing it we’d rather get 1p on the £1 and then turn into a mini golf (I swear they are everywhere! PLT golf range on the way! Ha)