Member Info for danl90

Three not very useful videos

Paul (who I like tbh) is saying the warehouse is happening 12 months before the CEO is telling us it happening - it’s calendar year 2023 not FY23. So it’s a long while off yet the warehouse. A site hasn’t even been picked or acquired

Also the reversal of the headwinds re freight of course they will go but the industry is saying this isn’t next 12 months (listen to analyst call where an analyst point JL to some research on it. You can tell JL hasn’t looked into it and is bindsided)

Of course they are right on the U.K. and the U.K. is a great beacon for boohoo. It proves the model works but how bad (don’t forget management themselves are saying trading is worse in Q4 than the shocking Q3) will the next 12-18 months be re international and how does this impact cash and capex?

Again not answered

DCF video - been over this. Lots of errors in it. Great the guy has had a go but you handed that model with those assumptions to a PE they would leave the room

Sam - basically says nothing of value except “used to be £4 so this is a discount”

Guy getting rich off tricking people into following him. But someone tell me one thing you learnt from that video that would make you invest?

Boohoo is on rocky grounds and it’s hard to see how they can manage growth this year (10% in Q3 was as international was positive growth in Sep, flat Oct and then all whipped out to 15% negative by Nov so how bad was November? Must have been, I’m guessing 25-30% down? And as MANAGEMENT are telling you getting worse in Q4)

Again don’t shoot me if this makes you upset. These are words from the management team. But if anyone wants an adult conversation I’ll happily discuss

Replace the word boohoo with the word greggs (or anything else you like) and ask yourself would that video make you invest in any business

Answer no

It’s absolute drivel!

Tell me (and I’ll put hands up and say I’m wrong) where you learnt anything in that video about boohoo

I must have misunderstood

Midway
Today 17:12
Posts: 1,838
Price: 123.20
Zzzzzzzz but get the popcorn out Dani will be right back at him

???

Kallu I’d reply but you post too much too fast I lose track!

That Sam is clueless

Boohoo has invested in manufacturing? When?
Boohoo has PLT which is growing fast, how does he know we haven’t had brand figures for 20 months now!
Boohoo leadership is top class, and yet never invested outside of U.K.
Boohoo is a “sound business” ok Sam want to try saying why?
Then he’s looking at “future growth” based on some odd and very old data. Any mention of margins? No

Any mention of cash and capex? No

His entire investment thing is “it’s a huge discount as it used to be £4”

He’s an idiot who did very well in Mar-20 using debt. There’s nothing and I genuinely mean NOTHING in that video that would make you buy any stock (ignore it’s boohoo). That’s just terrible terrible investment thesis

If you think a stock is cheap as it used to be £4. You’ve not a clue

Future earnings, cashflow and returns. All future is how you value a stock. This is all missing.

You literally took a dig at me!

To say I’m not knocking T4G here. He might be right

I’m just trying to understand. Why is everyone so touchy?

Oh yeah it’s because they only ramp and can’t explain anything (midway, Richie, rag etc)

I don’t spout up or down. I comment on the business

I don’t care for ramping or deramping (I’ll go at Kallu just as much). I think you’re upset at something today

Want to talk about it?

@midway what’s your issue? T4G is explaining something and I’m interested. What’s the point in the board if it’s not about learning and helping each other?

The which article I posted is March 2021 so recent

It starts off by saying “ The Distance Selling Regulations no longer apply in UK law. The Consumer Contracts Regulations - which came into force in the UK in June 2014 - now apply when buying online.”

The distance selling regulations you referred to are (according which) not even law anymore

Also in your extract you’ve misunderstood it’s says it’s the traders responsibility

.—(1) Where a sales contract is cancelled under regulation 29(1), it is the trader's responsibility to collect the goods if—

(a)the trader has offered to collect them, or

A - would be what boohoo do so let’s say they scrap free returns. The return then falls into B

(b)in the case of an off-premises contract, the goods were delivered to the consumer's home when the contract was entered into and could not, by their nature, normally be returned by post

But under B boohoo isn’t required to pay for the goods as the clothes can be returned by post. This is how they were delivered in the first place and how most people perform returns

So there’s no onus on boohoo to provide free returns and that’s why so many (I can get you 10 or so examples) companies aren’t or don’t offer free returns on clothes

There’s another which article here

https://www.which.co.uk/consumer-rights/advice/i-want-to-return-something-bought-online-aqsD32m9r5P3#the-consumer-contracts-regulations

@kallu the same point for boohoo is the same point for Shein. They WERE booming under lockdown and longer wait times

Although rag claims I’m always in hindsight I was saying when boohoo bought the London office they need a US warehouse as it’s FAST fashion. We don’t know how Shein is doing atm when consumers need items for events in shorter timeframes

Were Shein also same as boohoo in selling comfy and swimwear. We honestly don’t know. Will very hard returns (if at all) with Shein be an impact. Again we don’t know. We only know historical and even then the revenue and growth of Shein is vague and anecdotal

@wolf, seems odd you say it’s game on with US warehouse as this was what I was saying last week and I was myopic. My whole rant last week was it’s impossible to claim you’re investing in a business when that business doesn’t have a plan for steep steep decline in 50% of its business

The group really can’t wait until 2023 for a US warehouse. As shareholders we should be pushing for JL to go in my view. He’s on the big bucks to see how the business and industry works and yet we are the only one without a US (or even EU) distribution

It’s ego why they won’t use THG or go back onto Asos

In all honesty I really think Asos and boohoo need to merge. Asos needs the brand power of PLT and boohoo need a work class platform

I’d then bundle Debenhams and the older brands into a separate company and spin off (so as shareholders you still own both)

The annoyance for boohoo shareholders is you won’t get the multiple expansion a “marketplace” gets as a division inside of a bigger business (this is the same for the resale platform they will launch - I wouldn’t call it PLT resale)

And some of the partnerships SoftBank for the US also haven’t started

Myprotein deliveries in under 30mins! Wow

Also clearco would be great

And that’s a fair point but the difference here is there are alternatives

Ted baker is a more premium purchase so I agree you may wish to wait for that quality and fit. With fast fashion we know this is less apparent and boohoo management tell us this. THEY say (so don’t shoot meet it’s words from the Ceo) that the speed of test and repeat gives boohoo the right product before anyone else

That speed difference is a week to two so if you then lose a week on the delivery side (along with higher expense and costly returns) then your proposition is same or worse than competition. Why would you buy PLT over fashionova if you live in Cali?

I don’t disagree £100m of revenue was sold (again I said it’s not going £0) my point is compare to the competition and industry. Asos sets the bar on TAM. It’s one or two days delivery slots

Is Japan now in Boohoo’s TAM as we have a localised website? Well I think we’re lying if we say it is

The £100m is historic and can be inflated from product mix. We know sales slowed so much in November it whipped away growth in Sep and a flat Oct. So how bad was that month! And again MANAGEMENT (don’t shoot me as their words not mine) are telling you current trading is worse again (lower Q4 expectations and pulled all guidance for next year)

So the £100m your referencing is not what is currently happening and what management are forecasting

Again I’ll be talking rubbish and wrong but it’s just what the ceo is saying too

Selling distance rules

https://www.which.co.uk/consumer-rights/regulation/distance-selling-regulations-aAijb9Q8UT3V#what-should-you-get-back-if-you-cancelled

The “cost” of return can be the consumers. Boohoo doesn’t have to offer “free returns” by any means under the law. It does this solely as the market has created this ie Asos offer it so you have to

It’s not to do with law at all. I thought this was obvious as I always check the “cost” of return when buying online

Also my point on international wasn’t to say “go to zero” it was saying you can’t service the customer. Again Asos is a great example. They include in their TAM customers they can service within a day or two (it’s FAST fashion after all). So if boohoo was to apply the same industry leading (Asos are on fast fashion delivery) then 50% of your market falls out

It’s like new boohoo websites in Japan. What’s the point? Who in Japan will wait 8 days for a boohoo dress

Boohoo should have saved the £100k or whatever they paid Peter Jones off dragons den for those website and get talking to THG so they can have local Japan websites and 2 days max delivery

So I think this is a fair base case. 1.5x can easy be 2x but I want to see more own brand revenue in beauty and more view on geography split in nutrition. I’m also curious on how pricing impacts demand (I favour lower margins and growth in market share atm)

Ingenuity has the ability to shoot the lights out and that’s the cherry here

Sorry it might be the way I’ve wrote it but I was saying “for most” as in funds and analysts who have now taken a big slash to their holding or price targets

I was trying to say that I do value ingenuity but it’s hard to say it’s worth a huge huge amount as atm you only really know one thing - ARR of £122m by FY22 (I know this is a low ball and have a whole 12 months to grow this)

I mean should Ingenuity be valued at 10x revenue (or whatever it is for Amazon and shopify) then of course but I think Simon Bowlers point is fair. Atm it’s just a bit too small to really say it’s a clear competitor to Amazon and shopify. But this was way SoftBank was a game changer as 1) they know how to grow it 2) the partnerships are amazing (clearco I think is a cool idea and from this year gopuff will put myprotein and also ingenuity clients products in the customers hands in under 30 mins! That’s insane) and 3) the huge injection of capital takes away any worries of dilution for growth and also means the beauty business can get back to M&A (this is why I believe SoftBank had to put in £1billion as once they wanted to put all growth into ingenuity it was clear cash would move away from beauty M&A and into ingenuity growth. So in part SoftBank put money in to get beauty accelerated for lost M&A opportunities)

In my view

Beauty - 1.5x revenue as beauty usually valued high but we aren’t given enough colour on organic growth. Vertical integration is a huge value driver but there is a lot that is just “selling” (this is what lookfantastic and cult do). What I think needs to happen (and will when it splits) is THG learning from LF and Cult what are up and coming brands and taking stakes in them to then use the platform and grow them and even scale manufacturing and packaging etc
Nutrition - same and for same reasons although this is more own brand I feel it’s a tough market. I’d like to learn more about growth rates in each market. Like how big is myprotein in India? Imagine being the no1 protein brand there and the growth that could be!
Ingenuity - 5x ARR is low I know but we need to see it scale and be self sustaining. This comes one of two way 1) £400m ARR (so we are 25% of way there) or 2) SoftBank deal

The kicker with 2) is that that gives us a a wall of cash for hardly any dilution but for me I price that as upside and not base case

Again “ it's still a stock that was around 600p for over a year and is currently 229p”

This is what I’m saying. Nothing is cheap as it used to be more. This is not investing. This is punting/ gambling

600p was driven off
- above expectations revenue growth (this is now questioned on an organic basis and nutrition slowed£
- ingenuity having a high value (this is now £0 for most and in anyone book - even mine and I’m bullish - with revenues of £130m it’s clear there’s potential but to put a big valuation on it when we aren’t given clear metric to monitor is again a key factor). Why won’t they tell us about nestle for example?

Re the shorts data I think it clear that we don’t have an accurate read. I wouldn’t trust free data online. A Bloomberg terminal is £35k per annum which has this sort of data. You aren’t getting it for free online

“ Also let's suppose it true then the horts were sells that have already happened in Dec when the price increased 20% so won't impact price in future until they are closed which means a buy in jan”

Not just picking this comment but also the theme of what’s being said above but this isn’t what shorts are bothered about or how they work

They aren’t selling stock to push it down and therefore now spent and therefore will only be positive as buy in Jan

The shorts are betting that results update will be bad. The day to day movement of the stock price is irrelevant for them. Their day to win or lose is results

You see the former view all over LSE boards and it’s a myth. Shorts bet against the perceived value of the business. If results are bad or below expectations then business is worth less so they are short

Sorry not “buy others”

I mean and others. I asked this on the Rev B update call!

I think it’s perfectly reasonable to tip Rev b and not like THG. With shares there is valuation. The best company in the world can be overvalued and therefore a sell

Rev b is powered by THG in US, aus and NZ and will be buy others but it’s different to THG in being truely omni channel (this is why I own Rev B)

There is reason to be concerned with THG. The valuation is still high IF results are bad (this is what the boohoo board can’t understand they think it’s “cheap” as shares used to be £4)

I think THG will have traded well over Christmas especially beauty. Also nutrition will have maintained growth

So all will be ok. Also ingenuity we know has new wins

I saw the video posted yesterday around some of the aggressive accounting and there is food for thought however I’d say

- warehouse commissions are a fair add back as 1) ingenuity isn’t the scale of Amazon yet ie the revenue isn’t covering its standalone costs so a better view of the “commmerce” trading element is more useful. Also THG is not setting up a factory a week like Amazon so they are less norm

- covid costs obvious PPE etc is an add back

- higher transport costs I think the point here is illustrative. It’s costs above normal. Not just removing entire flights etc. so yeah there has been extra revenue but that revenue would have always happened (as there is a shift to online and customer retention dynamics are a large part of the growth - so a misunderstanding of the sales growth by the guy in the video) it was just the plane was £x to charter and not £y

Cost of raising capital - always an add back as for us as shareholders this is exceptional as we are not being told to expect constant capital raises

That’s my 50p

@kallu the analyst on the isnt understanding he’s making the point that actually should this data have been given all along

He’s annoyed and is saying shouldn’t this be disclosed as it a part of the model analysts can’t add into their model as the data isn’t given. So it leaves them exposed to something that’s clearly shown to be material

@matty boohoo can’t change returns policy. It’s dictated by the market. Competitors offer free returns and therefore so do you

MW short is simple to understand. There is 50% of the business that boohoo can’t service. Why is this difficult to understand?