Member Info for danl90

@rag “ability to deliver further value” no you’ve mis-read. I said the risk/ reward dynamic changes. I said at £5 I’m happy with my reward but the downside risk (should the market get competitive) would for me not be worth it. Outside of this single investment I have other things and the gain at £5 is plenty to add to my life. So I wouldn’t risk that reward. It’s not a criticism of boo it’s a to see £6 is 20% but the down would be more (given the high multiple) so I would be happy to sell - make sense?

“ The whole value sector on H St has collapsed many times, its never just about prices” I said this in my earlier post. I fully said there is plenty of room for pricing in fashion but I said I see this capacity as limited for fast fashion (post @ 19:26) so here you’re just telling me something I’ve already said

Pricing doesn’t impact? 100% disagree. Hence why you see high end (LV) mid range (coach) and cheap handbags.

If coach and cheap alternatives didn’t exist LV would sell more handbags. Cheaper alternative will always have some impact. LV can mitigate this a lot more than boo as the brand has huge elasticity. But a lot of boo’s clothing now doesn’t have a logo or people would know it’s boo. Those dogtooth knitted vest tops you see everywhere they all look the same so price is the factor.

The example with cars and insurance is not to be taken literally it’s a comparable I’m using to explain to someone in terms they might understand. But it doesn’t make it untrue. If boo’s prices had to be slashed 10% then the ability to hit the 20% yoy growth the market demands gets 10% harder. Once again I’m not sure that happens but if it does my risk is higher than the upside. At £5 I feel all of this factored in makes sense as a gain I’m happy with but a loss I wouldn’t stomach

Also the brands are cool and set trends but in terms of following trends that area is more competitive with Shein and Ali express - they can knock off ohpolly dresses just as fast as boo and sell it cheaper. A factor today? As I’ve said no but it can and at £5 I don’t want to pay to find out

Also to point out you disproved you point re price as you even demonstrate elasticity in your comment “they can chuck an extra £1 on” ok could they put on £2? What about £5 or £10. So actually you see the limit of brand in fast fashion. Where as Rolex throw their prices up 12% or so and the waiting list is still 8 years.

If boo went up 12% you still think we’d grow at 40%?

Have a muse over your thought before you blurt back. For someone “who lives and breaths” it you can tell you do the B2B element

Just to clarify glen is referring to the defensible position. They can’t dictate pricing (although they can cut demand)

It’s the scale point and that the materials they have so pricing is driven in their favour. If that changes ie copper flooded the world id sell as the fundamental would have chnaged

@rag "hero to zero in £5. Ok fully get it, think the reasons are flawed"

No I haven't said boo goes to 0 I am saying the market becomes more competitive and I don't want to hold a company on a x40 multiple when things get competitive. The current market dynamic of just taking market share from shops will reduce and more and more online companies will establish. Why is that a flawed investment thesis to say I don't like a competitive market? I said quite clearly for me that isn't a boo issue its a market/ industry issue (Dan said "Its a sign of industry pressure so this wouldn't be me leaving boo for a boo issue but rather i'd exit this sector until the smoke cleared and it was clear who the winner was")

An example for me here is car insurance. There are great businesses who make a lot of money but the only way to grow is cheaper pricing. Not for me. I'd rather hold a business that can maintain or dictate pricing or have other defensible positions. Like glencore. Only so much copper in teh world and they own it. Also the trading division relies on huge scale which no new entrant could create as glen's current scale and the fact it markets it's own raw materials means it can operate a far lower margin extremely profitably as it owns the whole supply chain - defensible

Sorry typo again "i'm NOT saying i want to be merc"

@rag sorry we crossed comments

"this is fashion, this market has and always be one of the most competitive sectors, it's littered with casualties" yeah but so far as boo has been concern they were physical shops and not only did boo have great brands to differentiate but there has been a huge structural shift to online shopping (its quite well documented) so while the shops were " competitors" in that they sold clothes their business model meant they weren't really "competitive" - i think topshop went bust recently?

"OK just so i'm clear and to confirm your bailing at £5.00 because the market is becoming more competitive, def got that right because i can clearly see you have said that and your worried about new entrants with different models challenging BH" - yeah risk reward. I'm happy with my reward at £5. The multiple is still high and any pause in growth would collapse the share price. Not saying it will happen but that's investing you can't always know the top but i have in my mind a price where i see value without a huge element of risk - investing 101 i would say

"you think BH prices should go up but your concerned about price pressure (despite as we know its BH trade mark and it's served their growth well)" no i don't think boo should put prices up at all. What i'm saying is is that often new competitors try to gain share by undercutting. Atm the company has great margins so we can afford a race to the bottom but to me that's not attractive. Its a sign of industry pressure so this wouldn't be me leaving boo for a boo issue but rather i'd exit this sector until the smoke cleared and it was clear who the winner was. A bit like telematics when that came out you saw a flood of them all sell the product cheaper and cheaper and then accept shorter contract lenghts etc so what was a great business model to start with became commoditized. Not appealing - some will be happy there but not a model for me

"I'm genuinely interested that you think this is all happening after £5,which is not too far away, and so your absolute resolute conviction and belief in BH falls away possibly within 6 months or after £5 which ever is sooner, any more value is just the market is just too mature for it to progress any further ?" - no not at all I'm just saying £5 is my "I'm happy figure." I think we will hit £5 over the next 12 months (sooner? great!!!) but in the period 2, 3 or 5 years i think these new competitors will emerge and as i say I don't like competitive markets where there is limited capacity to compete on much other than price. I was saying i want to be mercedes I'm saying that industry allows that dynamic. Fashion does as a whole but i don't think fast fashion does

Always have a target of well you want to sell - sometimes it goes past but you can't call the top and you'll never call the bottom. Just know you got a good result

@rag, make sense? For you

I like businesses with either a clear market leading model - - boo atm have great brands - you want boo you have to buy boo and people still want it
- shorter lead times (on average)
- consumer shift to online
- etc

Or a huge defensible position
- stuff like forterra. Would be hard now for anyone to enter the U.K. brick market as limited clay and importing bricks is expensive so while everyone can ramp up there is an equilibrium that maintains. Also structural shortage of bricks

Atm both of those exist for boo. When the second one goes (or lessens is more the reality) I sell

Sorry meant to say “I’m not” at the start

@rag I’m pointing to a maturing in boo being the reason for it slowing. I clearly said in my first sentence on this was that I view the market as becoming more competitive. So it’s the market maturing not boohoo

Atm boo is the industry leader in fast fashion in a purely online model. But new entrants with different models entering the market will of course challenge. At this point I’d sell as I don’t like to hold stock in markets where price pressure (people always want stuff cheaper) and competitor pressure (people always happy to undercut you to make waves) exist as that leads to a race to the bottom and unfortunately I don’t see fast fashion as the type of market you can pick a materially higher price point based on quality like you can do with say cars (Mercedes don’t punch with Ford etc)

So no everything you said misunderstand my point again. I’m referring to competitive pressure and maturity in the market. Atm we compete mainly against brick and a consumer shift supports this. That begins to die down and the playing field flattens. This is not attractive to me. Not saying boo can’t win but at that point my risk view out ways my reward view

Also I never asos’s growth wasn’t great. It’s awesome! My point was that growing is nothing to do with just being young so thanks for proving my point by providing “mature” asos’s fantastic growth.

Yeah I think others have missed the boat on pushing activewear sooner and you physically go and check this

Asos - no market launch
Missguided - launched yesterday
I the style - 4th Jan

I make statements and I back it up with corroborated evidence. Try it, once

@rag so we grow 40% just because it a "young company?" really? is that the only reason why?

Missguided is young and hasn't grown every year. IntheStyle also hasn't grown every year. so can't just be that we are young. Also the rate of growth not a factor?

Maybe you can distil for us how boo grows? From a man who "lives and breaths" the industry. How is it we have got and get our growth

"Asos ROCE is in line with industry average and the markets expectations for a company of this age" - Asos P/e rating is the same as ours

"So you are selling circa £5.00 which maybe given the hype might not be too many months away.
Why?"

As I believe the market will get more competitive. Over the next 3 - 5 years and the unfortunate thing about being a listed business is the need to constantly meet targets. Should the industry get more competitive and boo consolidate their offering, proposition or have to invest capex at a higher rate the market will get upset (they'd be short minded) but that's the listed world

Similar to Asos when they had logistics issues. Was a fixable problem but the market pained them for it

£5 is possible (on a p/e analysis) next year a move higher will be based on further future earnings which would mean my cash in for 2 - 3 years and that is around the time i think there will be a crunch

Wouldn't change my view on this stock long term but 2 - 3 years life will call on my savings I imagine

@rag

"One question i have for you, if you can answer without being such an ******** is that if, our Boo, your Boo, us Boo , my Boo is so incredibly good at what it does is why you i believe have ear marked £5 as a sell for you to bail personally?" no I think next years EPS (11p x 1.2) x 40 gives you £5. So hopefully management commentary on outlook is positive and this is the new target price

"mark down model is flawed and cannot continue," - this is all Boo has ever done. Nothing but the marked down model. But lets see how flawed it is shall we?

Revenue at IPO (2014) - £91 million
Revenue atm - £1.6 billion hoping to £2 billion

Yeah it's flawed! Do you ever think to do a bit of research or corroboration before you try to make a point?

I think we have answered it. And you can see this Asos may be producing active wear but they aren't "launching" it as a "new" season (there is nothing on any social or website)

Where are PLT and Boo brought forward the "new edits" and "collabs" and they did this through heavy marketing in December

We must do something right Rag as Boo grows at 40% and Asos own brand doesn't

@danny the quantum is. I’m not saying he has merit. I’m not saying he’s a good or bad lawyer. But I tend to know when a company I own shares in is getting sued for £100m

My point was more that rag doesn’t understand our marketing model and proposition. As he thought it being reduced was an issue. It’s not it’s just how we do it. I was just highlighting that even that was obvious to Saul Goodyman as you say

@rag you need to sell this share as you don't understand it

"It's on line ALL marked down" - this is our business model. We do this with every single item. We never put anything on for full price. We are actually being sued for this in the US - it's pretty material so you should have been aware really

"in the warehouse" i'm using this interchangeably to mean manufacture or distribution to asos. Not a difficult concept both are factories/ warehouse looking places and I say this as you said " very large %'s of our orders are in activewear, this includes Asos 4505 range" so they are current orders. A current order with you isn't available to buy. Even so and linked to your first point this is just current rolling items my point was we went early with our activewear (launch of new and promotion).

Go on Asos IG page the first post to customers about fitness is 23 hours ago. There was hashtag they launched two weeks back but links mainly to third party products and not their own

"You may be partial to their wears but it's your opinion and no not sooner, everyone had has and will have an offer, it basic basic buying not just for this time of year but very bloody week of the year." we launched a specific edit with karruche. Missguided dropped a specific edit with Zara Mcdermott

Instagram post on 25 Dec on boo - "Boohoo active launches tomorrow" this was a new edit again.

Maybe that the difference here asos is just pumping out generic stuff and tweaking where as what gets us great attention is packaging things into "new" yeah its all gym stuff but both PLT and Boo marketed it as LAUNCHES and to much fanfare and noise - i can see nothing on asos and no traction in the hashtag (<100 ig posts)

"Your other point
all that was factored in PLT's gymwear was available to buy from mid-Dec the Karreuche drop a week or so later. You could hold it in you hands over NYE. Boo's launched on 29th Dec you could hold it in your hands on NYE. You just said you have orders to manufacture Asos's 4505 range. Well that is behind you don't have to work in the industry to see that. I went on Asos website and there is no new gym range. Our's has been out for getting on two weeks and is almost sold out! Asos's is still being made"

Yeah i think we have answered this. Asos pump out generic gym wear. Boo and PLT make it exciting with "edits", "collabs" and "launches" and use IG influencers (PLT - Karruche 10m followers and Boo - Charly Jordan 4m followers) where Asos just pops up in the general noise of the website and hashtag (prayer more like)

Maybe this explains why asos own brand isn't growing they just don't get marketing!

@dannyred. Shame if there’s anyone who can ever claim things and not back it up it’s you! A magician for sure

@P agree rag is not in this group. But he will die on his sword before anyone bad mouths asos (three profit warnings, no growth in own brand and lower margins) but how dare I compare boo as being better

@dannyred on what topic we didn't discuss anything last week? Maybe you dreamt of these david vs goliath moment :)

@P I disagree. I think I'm open to opinion and views. When you and I discussed I happily held my hand up and said I had the wrong end of the stick

Most time I get wound up as people bark things to say I'm incorrect but have no evidence for their view other than "how dare you offend boohoo you're a deramper". I think there is a direct correlation between these people and windows being licked

what's rag got 15 for? china lead times? factored in and the stock is on the shelf. it's all you need to know ha

@rag you miss the point. I'm not saying boo had some great vision with activewear. Everyone know it launches in Jan what I am posting about here is that we went early. This isn't dissimilar to why you see Christmas stuff the very first day after halloween as supermarkets realised there was a tonne of cash to be made if you stuff was out first so the launch kept forward and forward and forward. This wasn't a "marvelous insight" into Christmas but everyone knows being first has an advantage

Where is the boo stuff today? on the website or sold
Where is the asos stuff today? still in a warehouse

Boo might have a longer lead time so they obviously started a lot earlier. I'll say it again as it's really simple

Where is the boo stuff today? on the website or sold
Where is the asos stuff today? still in a warehouse

This isn't a finance point at all. Try it for yourself. Go on PLT website the stuff is there you can get it tomorrow. The asos stuff you just said is with you for manufacture

"These ranges are on going they are never one offs" - yes we dropped our newness (Karruche edit for PLT a "one-off" and boo dropped 29th Dec) - asos haven't dropped anything new go look on the website

https://www.prettylittlething.com/the-edit/2020/karrueche?navigation-campaigns-karrueche

" i'm telling you how it is, don't be so blinkered and dismiss and patronise" well how come i can buy PLT edit with Karrueche but i can't buy the asos 4505 range in your warehouse?

"Asos sells 3 to 5 times more than BH" really? As we discussed last time asos own brand sales - £1billion and boo is £1.6billion own brand sales. We are also a cheaper price point so 60% higher revenue with a lower price per item? must equal higher volume

"both have a place" agree but any customers who are asos fans and PLT fans and love karrueche already have their wardrobe full! so why buy more asos?

You seem to take any criticism of asos personally as though i'm ringing the death bell. All i'm saying it it's been a great decision for PLT and boo to go early this year. Asos might kick themselves after all 2019 own brand sales £1billion and last year £1billion, maybe they should think a bit more tactically. Also you wouldn't think Asos have had a string of profit warnings the way you talk about them!

"just flicking through on line pages" - PLT website you can buy it and have it tomorrow. Asos is still in your warehouse. It's not a very difficult topic to research tbh

@rag and all that was factored in PLT's gymwear was available to buy from mid-Dec the Karreuche drop a week or so later. You could hold it in you hands over NYE. Boo's launched on 29th Dec you could hold it in your hands on NYE. You just said you have orders to manufacture Asos's 4505 range. Well that is behind you don't have to work in the industry to see that. I went on Asos website and there is no new gym range. Our's has been out for getting on two weeks and is almost sold out! Asos's is still being made

I appreciate your insight Rag but sometimes you really miss the point or overthink. Lead times have obviously been considered here and i'm saying boo and PLT tactically have launched way earlier as you could HOLD the product by NYE vs gym wear still being made. There is a huge difference here

We care about SELLING products. Ours has sold (almost sold out) Asos's is in a warehouse - once everyone has bought 2/3 gym outfits you think they will buy more when Asos drop? Maybe. But I'd rather be sat where we are now with our stuff sold rather than in a ware house

@lucky not really the point I’m making tbh. It’s more that as investors we shouldn’t wear blinkers. I’m trying to help others. So I think you comment is a bit immature

Also i need to point out the irony here

NO ONE cared to question that we were trending on twitter. 4 of you actually liked it as though it was a great thing

But mention there is a platform we are getting beat on and WOW you all lose your minds!

If that isn't a clear example for you that some of you are selective listeners I don't know what is

PLT has c.450k followers on twitter we have 1.3m on Tik Tok so TT is already a bigger platform for us (second most popular for US teens). #pltlifestyle that was trending got 266 retweets the "itsfromboohoo" campaign got 137m uses

Do you still think Tik Tok is a load of rubbish or is that your view just because we aren't no1 and that was too hard for some of you to accept?