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All they have done for the past month is discount discount discount and hardly a surprise that brands will start restricting supply (easy in current climate for brands to put down to their own supply chain issues ;-) )
Margins are getting thinner and thinner and PE will see straight through it.
Stefano5 - I'm only being 'smug' (in your eyes) because of the stupid speak we received when this thing was 250 and any remotely negative comment received back a barrage of abuse and that averaging down was going to be the biggest told you so moment in a couple of months. I'm not sure I said whether I made or lost money at £6 so have a think about that one ;-)
Trust me I've made my fair share of mistakes. As for Karma coming to get me.... you best check which stocks I own because I don't want to bring you and others down as well... btw, I do plan to buy THG at some stage so you're f***** then. HA
At the level of discount on mass (non company own brand) market products it really is. I've placed plenty of £25 orders that even with 50% margin (pretty normal) from 3rd party brands after the discounts/vouchers and then delivery costs (greatly out of their hands) there's barely £3 profit in it and that before plenty of other costs need applying (google ads, quidco, warehousing the list goes on....).
When people constantly talk about averaging down (multiple times) on a stock like this you are catching a falling knife. If you nail it a double down on the bottom of course it works but I've been reading for months on here people p1ssing their pants with excitement doubling down at £2 shouting about how clever they are.. That's a blood on your hands scenario in my book.
Good luck to all, it's not a dead business just a very very low margin one and unlike Amazon the lack of logistics ownership is the biggest limitation to it be able to move margin the right way.
Finally, thanks to the mug that bought my stock at £6
You should list Matt's personal achievements. I'd imagine a series of cars, holidays and botox sessions would kick the list off nicely.
While the list you write contains some great achievements the share price was ridiculous still and plenty of the ingenuity clients will realise it's a incredibility expense model (I write as someone that was approach by them).
To be honest the revenue share (which was in the proposal I received from THG this time last year) is even more unattractive to potential customers. As I said if a massive brand that can't be doing with bringing in-house and want to expand to other markets super quick I totally get it. I'm just really stating if you want D2C to max out on profit you really wouldn't use THG. Over time I believe as e-comm becomes a larger share of business companies will start to look out how to actually make some money from it - that will also include trying to reduce amount of business going through Amazon - which is possible even more unattractive (although from the numbers I have it's pretty similar net net)
Using the THG really isn't anything like doing your own D2C as your describe. They charge massive upfront costs / minimum term periods and additional costs left right and centre (including hugh fees for additional territories added on). Only big players can really use them on the basis they can't be doing with the hassle of setting up and running their own D2C.
Personally believe massively overvalued business.
indeed - the RNS came literally as I was writing.