Member Info for FED1

My impression of Shein is that they are low key and are reluctant to do anything which raises their profile. I note that Shein has an office in Manchester (albeit with just a few people apparently).

They probably make Boo sign the NDA.

I thought the level of questioning by analysts during Q&A was weak. Asking Dan his thoughts on UK consumer.

The guidance is sparse. Did analysts have a meeting after?

Debs wrote down the PLT website in its impairments of intangibles as having no future economic value. So possibly a brand and customer list sale.

If true, forming a JV with Shein would lead to a re-rating for Debs.

We all thought that Frasers was the only viable JV partner for Debenhams in terms of releasing value from its portfolio of brands (Debs and Labels).

“Strategic partner” = JV

With a party associated with TopShop bid; a major global player; impacted by US tariffs? = Shein

The valuation achieved by ASOS for TopShop? = going to net cash balance sheet

It seems they are in talks with ABG and Shein. Shein wants US exposure.

When they say strategic buyer, do they mean a JV?

Analyst Q&A

Analyst: "Can you please explain the rationale for the decision to sell PLT and not the other used brands?"

Dan Finley: "You see, in PLT, we have a fantastic, globally recognised youth fashion brands that is of significant size and scale and we believe has significant opportunities ahead for it.

As part of our ongoing business review, we're determined to explore the opportunity to maximise value for all shareholders.

We've noted with interest some of the interesting changing dynamics and macroeconomic situation relating to that fast fashion world, notably with the changes that have taken place in North America and the impact that that has had on a number of major global players.

We also note with interest the valuation that was achieved for Topshop by ASOS on the interested parties associated with that transaction as well.

So we see the opportunity to potentially realise significant value through a potential sale to a strategic partner of our PLT brand, and that's something that we are exploring as part of our ongoing business review."

Bfd,

There is an element of discretion to determining market sensitive information and whether it is inside information.

Agreed that a potential sale of PLT is no longer inside. However, there was speculation on here that a deal had already been struck. If for instance, they announce next week that Shein has paid £200m-plus for PLT, and share price saws 20%, then it is questionable.

Ultimately it is a matter of judgment but my point was we should not expect an imminent announcement on disposal.

My first thought is that there is no deal in place for PLT. Carol shouldn’t possess material inside information if she buys shares. Hence, no announcement is pending.

There’s been a webcast?

https://stream.brrmedia.co.uk/broadcast/6846b631bb48f90012d036fa

*reported loss.

I think we have been set up for further restructuring costs in FY26 with write down of PLT and DC closures.

Ultimately, I believe more interested in cash flow. But yes, there may be another very large adjusted loss (low cash items) in FY26.

So we get the AGM ballot tomorrow.

Will there be another surprise?

Will Dan have an analyst call and presentation?

Obviously the market has questions. Guidance was a bit sparse.

Considering the £107m in paid Umar in shares in 2020 is worth much now, then it be respectable if Debs can claw back the £161.9m in cash paid for the 34% stake.

Arguably, this was one of the more costly capital allocation decisions so fingers crossed 🤞

No doubt Frasers will use this as opportunity to attack Kamani.

https://businesscloud.co.uk/news/boohoo-completes-324m-plt-deal-as-share-price-tumbles/

https://www.reuters.com/article/business/boohoo-buys-out-prettylittlething-shareholders-for-270-million-pounds-idUSKBN2340PZ/

Apologies, discontinued revs was £420m.

This gives £105m to £168m at 0.25-0.4x revenue

PLT on 790m rev.

You would hope they get 0.25x-0.4x revenue for it giving it a disposal price of £200-300m.

Re PLT deal

Maybe they want to slow drip positive info to get share price back up. To be fair, this does seem like a credible plan for business.

Alternatively, PLt had a disastrous 1H and they only recently decided to offload it.

Let’s hope the former.

Why would they need RCF if a deal was already drafted?

Re PLT deal

Maybe they want to slow drip positive info to get share price back up. To be fair, this does seem like a credible plan for business.

Alternatively, PLt had a disastrous 1H and they only recently decided to offload it.

Let’s hope the former.

Why would they need RCF if a deal was already drafted?

Overall, there is much to like. I think analysts will be holding off upgrade until it provides revenue guidance for Youth Brands. I note strong growth at Debs in 1H but wonder if Youth ex PLT is still double digits.

Not sure I buy the capital light excuse for having such lean inventories.

But yes, disposing of PLT is substantial for business review and will hopefully put group into strong position where it doesn’t need to pay RCF interest.