Member Info for Peoplepower1

Online-only business model
Online is growing exponentially
Growing globally - USA, Europe, UK, Australia, sells to over 200 countries worldwide
Global fashion market worth £2,000bn, UK £71bn, USA £330bn, Europe £350bn, Rest of World £1,250bn
9 Brands covering age groups 16 to 40 and beyond
9 Brands covering different tastes, Boohoo, BoohooMan, Prettylittlething, Nasty Gal, MissPap, Karen Millen, Coast, Oasis, Warehouse
Each brand has its own management and design team to prevent overlapping
Each brand has its own website
Each brand is run like a standalone business

Not another pump - please stop pumping shares that should be dumped.

GGP - Greatland Gold has not yet turned a profit. Great caution is needed here.

Small gold mining companies are an inherently risky bet. Mining for gold is incredibly resource-intensive and competition is fierce for the best licenses to dig in the most prospective spots.

For every growth stock success there are 10 failed companies that showed similar promise.

Buyer beware!

Updates on his twitter account, he'll tell you anything and you believe it. I wouldn't touch Amigo at all.

Boohoo and ASOS are online only business models and so you can't compare their P/Es to any other clothing retailer.

Amigo is another pump and dump. Loads of debt, a FCA investigation and not doing any new business. I wouldn't trust James Benamor who owns the Richmond Group and was the founder of Amigo. I wouldn't trust Glen Crawford, the CEO of Amigo. They all sound like charlatans to me. I can't believe how many people got sucked into their hype.

Same with BWNG. BWNG is nothing like ASOS and Boohoo and never will be. The profit margins are very low. They have a problem with credit issuance. BWNG is daAnother one that's getting hyped because it's going digital and suddenly it's being compared to Boohoo and ASOS. BWNG is nowhere in the same league as Boohoo and ASOS. Boohoo and ASOS have high P/Es because of their future earnings and future profits. BWNG has a low P/E because it doesn't have such future earnings and future profits.

Research, research, research. You can't do enough research. Do the work and you'll make the money. Follow the hype and you'll get your fingers burnt badly.

Steve Johnson Chief Executive of BWNG - N Brown on 25 June 2020 sounded a note of caution around the year ahead. “The retail environment remains heavily promotional and the regulatory challenges in financial services have required us to adapt and evolve ...."

BWNG - N Brown

ANNUAL PROFITS PLUNGE

Results for the year to 29 February 2020 showed a near-30% drop in adjusted pre-tax profit to £59.5 million, as gross margins were eroded by cut-throat clothing competition and the company absorbed higher financing costs, on a 6.1% drop in revenue to £858.2 million.

Personally I would be wary of BWNG, another share that is being pumped.

Here is some research from January 2020 albeit a while ago, for me, it is still relevant.

Struggling home shopping company N Brown (BWNG) downgraded earnings guidance for this year and next in a nightmare of a Christmas trading update.

Savage cuts to forecasts reflected margin-crimping discounting in a tough third quarter for the UK clothing sector as well as reduced financial services revenue as the JD Williams-to-Jacamo brand owner tightens lending criteria in response to ‘wide-sweeping regulatory intervention’ across the financial services sector.

DAMAGING DOWNGRADES

Having coughed-up a PPI redress-driven alert in September, N Brown kick-started the New Year by downgrading adjusted pre-tax profit (PTP) guidance for the year to February 2020 to a £70m-to-£72m range.

That is materially below the prevailing consensus range of £78m-to-£84.1m and reflects a lesser than expected accounting benefit, the margin impact of highly promotional market conditions over Christmas and also lower financial services revenue.

Altering the way it manages its customer debtor book, N Brown also warned 2021 pre-tax profits will be flat because of ‘reduced scope for bad debt provision improvements’ combined with industry-wide regulatory changes, news that sent long-suffering investors heading for the exits.

Put simply, the steady improvement in the quality of the Simply Be-to-Ambrose Wilson brands owner’s debtor book, and the changes it has made in response to the new regulatory environment, means lower credit issuance to come with a knock-on impact on N Brown’s future sales growth.

There are several specific concerns with SYME (Supply@ME), the web of related parties which control around 75% of the shares, the July loan deal that saw £4.6m of shares controlled by Mr Zamboni used as security for loans. This technique is sometimes used to cash in shares without selling them.

Supply@ME is well beyond my personal comfort zone. I wouldn’t consider investing until I could see a track record of profitable operation. Right now, there are better growth opportunities elsewhere. Boohoo is one of them.

For me, Syme is another pump and dump.

From the RNS on 19 May 2020

Cash as of 8 May 2020 was A$4.4m. The Board also expects to receive a payment from the Australian Taxation Office of A$3.3m in the fourth calendar quarter of 2020. The Board is confident that the Company will have sufficient cash to complete the integration of the ex-Murata customers and the former Murata manufacturing assets, which the Board believes will result in a significant uplift in revenues and ultimately positive cashflow from operations in due course.

There are always negotiations going on during court cases. I know, having been involved in court cases for more than 15 years.

Boohoo is the share to hold because it will always make you money. Boohoo is a great growth share. Look for great growth shares by buying the weekend Financial Times and reading it from cover to cover. If something pricks your interest then read everything you can find about it before buying it and keep reading everything you can find about it on a daily basis whilst holding it.

Research, research, research is the way to make money on shares. You can't do enough research. Time and patience are also needed. There is no easy way. There is no short cut. Do the work and you'll make the money.

It's the tech part of the Hut Group that is attracting interest and not the online retail. The online retail is a small part of The Hut Group and is of little interest to investors.

Yes, I know all that and that's why it'll take off on IPO with too many chasing it. One to leave until it falters.

Manctopia - joined on 26 August 2020 and already so knowledgable with one or two posts. Another one to filter.

The Hut Group - For me, one to leave till the share price comes down when it falters for one reason or another. I never chase an IPO of this or any share.

Boohoo - Advantages for Buying and Holding

And even more advantages

Excellent at disrupting the market and grabbing market share
Social media is key to its success - superb use of social media, influencers and celebrities
Great marketing and growing list of celebrity influencers backing the brands
Part of its success is down to targeting under-30s who prefer to take style tips from social media influencers and buy clothes on their phones.
To drive customers to its website, it's worked on collaborations with Little Mix, influencers including Love Island contestant Maura Higgins and paid for celebrity endorsements from the likes of R&B singer Ashanti.
The strategy seems to be paying off. According to research by polling firm YouGov in May 2020, 11% of 18 to 24-year-olds had purchased something from Boohoo in the previous three months.
Boohoo was founded by entrepreneur Mahmud Kamani and designer Carol Kane.
The pair had worked together at Pinstripe Clothing, a company that was set up by Kamani's father Abdullah. It was one of the first suppliers to Asos and it designed and sourced clothes for Primark.
Kamani and Kane decided to cut out the middle man. They set up their own online fashion store in 2006, with the aim of selling on-trend clothes directly, and cheaply, to shoppers.
Some experts have said that one key element behind Boohoo's success is its online-only business model.
Boohoo turns clothes around quickly
Boohoo adds new dresses, tops, accessories and shoes to its website every single day.
To turn items around quickly, it uses what's called a "test and repeat" model, where it produces small batches of lots of new styles - sometimes even just tens or hundreds of one item.
The company has the supply chains in place to then ramp up production of the best-selling pieces. About 40% of its clothing is produced in the UK.
Boohoo said that the quickest a piece of clothing can go from design to sale is two weeks.
The only company you can really compare to Boohoo is ASOS. LIke Boohoo it has an online-only business model. Boohoo designs and sells its own clothes. ASOS sells third party clothes. Hence why Boohoo's profit margin on revenue is higher than ASOS.

Boohoo - Advantages fro Buying and Holding

More Advantages

Great management team with knowledge, experience, skills needed to grow the business
Learns from mistakes quickly and puts them right
Management will do everything possible and more to gain the support of the institutions
Adapts easily to whatever’s needed
Owns automated warehouse in Burnley
Tests and repeat items on a run of 10 or 100 to see how they sell before repeating the order
Up to date fashion from, for example, catwalk to online quickly and cheaply
Building a state of the art factory in Leicester to show how manufacturing should be done and how employees need to be treated
Independent review of suppliers, the only UK clothing company ever to do this
Opportunity to turn any negatives from the independent review into a positive by reacting to the advice and recommendations of the review and therefore providing confidence to investment institutions.
Managment will turn this whole episode into a positive movement for the clothing industry and create a transparent model that will provide employment in the UK.
This will provide confidence to the institutions.
The SP fall was due to reputational damage and this will be overcome with good planning/strategy/marketing and transparency going forward.

Boohoo - Advantages for Buying and Holding

Advantages

Online-only business model
Online is growing exponentially
Growing globally
Global fashion market worth £2,000bn, UK £71bn, USA £330bn, Europe £350bn, Rest of World £1,250bn
9 Brands covering age groups 16 to 40 and beyond
9 Brands covering different tastes, Boohoo, BoohooMan, Prettylittlething, Nasty Gal, MissPap, Karen Millen, Coast, Oasis, Warehouse
Each brand has its own management and design team to prevent overlapping
Fundamentals of the business is strong, increasing sales and market share.
No debt, £250million in cash, over £150million in working capital, £150 million in assets.
Total revenue/profit/net profit up every year for the last 5 years with forecasts suggesting even more this year, possibly 40% increase.
One of the quality metrics for Boohoo is its 5-year Return on Capital Employed (ROCE), which is 22.6%. Long-term, double-digit ROCEs can be a hallmark of companies with the power to grow very profitably.
A combination of high quality ROCE and momentum can be clues in the search for shares with the potential to deliver solid investment profits over many years.
Good quality stocks like Boohoo tend to be resilient, cash-generating businesses that can compound investment returns over time
Grown revenue times x twelve since 2015
Makes more profit from its revenue than ASOS does because it doesn’t sell third party items
Boohoo Gross Margin 54%, ASOS gross margin 48%
Boohoo spent £116.8m on marketing campaigns in the year to 29 February 2020 - almost 10% of its total sales.
Buys failing brands cheap out of administration - great at waiting for the right price before buying - only buys the websites and logos of failing brands
Boohoo bought Nasty Gal's brand assets, like its website and logos, in 2017 for $20m (£15m). It was founded by US businesswoman Sophia Amoruso who is credited with making the term "girl boss" mainstream.

Link to questionnaire for the independent review:-

https://www.levittqcboohooindependentreview.com/questionnaire/