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Times today part1
Boohoo’s makeover leaves Leicester factories tattered
The city ran on sweatshop wages driven by fast-fashion retailers. Can it come up with a new model?
By 2003, it was already clear to Santoshan Sangha that it was impossible to earn a living making clothes in Leicester.
The introduction of the minimum wage had driven up labour costs, yet high street retailers were still beating him down on price. Rather than pay his workers less than the legal minimum, Sangha switched to importing textiles from Asia, reluctantly bringing down the curtain on 20 years of manufacturing in his home town.
Over the next two decades, he watched in horror as Leicester’s once-thriving garment industry morphed into a hotbed of criminal activity. Now, the 64-year-old believes positive change is finally on the horizon.
Boohoo, one of the biggest beneficiaries of the rampant exploitation in Leicester, told suppliers this month they had until March 5 to bring all manufacturing in-house, leaving corrupt suppliers with few options to conceal illicit activity. At a stroke, the move puts hundreds of factories at risk of closure and endangers thousands of jobs. That could in turn lead to renewal.
“Everyone’s running around in panic mode now, trying to get their factories set up properly,” said Sangha, who now owns the Dry Ice and Antonio Falcone fashion brands. “Boohoo were the only ones putting the volumes in [to Leicester]. I don’t see a way back for a lot of them. This will let Leicester prosper and allow other retailers to move in. Boohoo should have done it a long time ago — they knew what was going on and just turned a blind eye.”
Long-standing problems in Boohoo’s Leicester supply chain became a matter of critical importance last July, when The Sunday Times revealed that workers were being paid as little as £3.50 an hour, prompting investors to dump their shares. Asos and Next pulled Boohoo’s ranges from their websites. Boohoo launched a QC-led independent investigation into its supply chain.
The company’s belated efforts to clean up its supply chain will reveal two things: the extent to which its profits were supported by corrupt activity, and whether Leicester’s garment industry can compete with cheaper overseas production hubs on a legitimate basis.
Yet the criminality in Leicester’s textiles quarter extends well beyond underpaying workers. Despite there being legitimate factories, some owners routinely evade taxes by subdividing their companies into different entities and dumping the one with the biggest tax liabilities into administration. Importers minimise duties by providing incorrect commodity codes. Not surprisingly, the National Crime Agency has launched an investigation into the city’s garment industry.
Continued....l
That should have read pp’s as in people powers help and advice (although feel free to thank your pop too)!
Keepcalm firstly please accept my most sincere apologies for assuming that you didn’t read people powers post correctly and that I also assumed you only sleep at night. Secondly I would like to thank you for your kind nomination for no1 assumer of the year given that you could have easily just omitted the ‘umer’ and nominated me for the much more suitable no1 ass award!
Finally I would like to nominate keepcalm for the weirdest breakfast award given that yesterday’s most important meal of the day consisted of four bars of Lindt high cocoa content chocolate. If you are successful in winning this award please don’t forget to mention that you wouldn’t have won it without pop’s help and advice!
Good skills keep calm. You ate four bars of Lindt dark chocolate went to bed last night and had a weird dream about streets (I’ll let him reply to that specific detail) all because you misread people powers post from 0630 hours this morning!
Don’t you realise the significance here? You have psychic (or is it psyops I always get them confused) powers my friend.
I have no desire to bash moose (I’ll leave that to streets too) but using you new found skill of seeing into the future you could predict the direction of travel for boohoo share price and get an even better hit rate than moose does! I’d recommend you don’t predict actual prices though because if you predict £40 by results instead of the acknowledged and universally adopted £4 prediction you’ll lose credibility.
Davesgold have you recieved details of their intention to undertake the open offer or have you received the details of your allocation of shares and closing date etc?
Davesgold- have you received notification of their intention to undertake an open offer or have you recei
Bruce i know what. Hydrogen is but what is magnahesion?
Dan - definitely a speculative punt. I got the primary bid notification and was intending to check them out when I got chance but the offer closed on the day it opened which piqued my interest.
Essentially bcn are responsible for 50% of the finance costs to build the phase 1 mine that intends to produce 17500:tonnes of lithium per year. The other 50% is being financed by ganfeng who took part in the cash raise off and increased their ownership of bcn to 30% in doing so.
They have all the necessary construction and operational approval in place and the building is due to commence immediately after the fund raise in 2021 and they expect the mine to be commissioned by h2 2023. Phase1
I was reassured by the institutional investments being in place (suggests cleverer people than me have done a bit of due diligence) but also by the gangfeng commitment given they are the downstream metal production facility so they want the lithium which suggests continued support and, given their holding, takes some pressure off in relation to possible future cash requirements.
The other thing that interested me was the size of the Sonora lithium field which is estimated at over 8 million tonnes or 250 year resource life. The phase 1 mine operation is set to produce 17.5k tonnes or lithium ore per year from 2023 but a phase 2 is planned to double that to 35k tonnes but if lithium demand goes through the roof there is always the possibility that gangfeng will push to extract more of the available ore more quickly.
As for day trading glen - no. I’m a buy and hold merchant. My isa, share account and sipp are all held within commission charging service providers which has kept my feet firmly on the ground in terms of number of trades I do. I have toyed with opening a commission free account given that 2020 was a busy year for me where I found myself taking some profits in order to invest in opportunities. I anticipate the next 12-18 months might be similar but I still imagine my approach would be to buy with the intention of holding until a share reached target price which could be holding for a matter of weeks or become a medium to long term project! (think buying boohoo last July and taking the initial stake back at £4+ In September letting the remaining shares ride).
Oracle/webba/danl - I hold Anglo American and glencore and also have blackrock world mining investment trust,. However I recently to9k a small position with banacora lithium bcn. They recently did a fund raise so came to my attention through primary bid and whilst I didn’t take up the primary bid offer because I wanted to look in to them I have since purchased shares. Sp recently dropped from 68p to 45p (the offer primary bid offer price).
Lithium miner in Mexico who raised the funds to start build of the mine and expect to begin production 2023. They used to have a 50% stake in a German lithium mine but they recently exchanged it for a 44% stake and royalty deal which gives them some diversification from Mexico but frees them to concentrate on getting that up and running. Their biggest share holder is ganfeng (Chinese lithium producer who listed on Hong Kong exchange at$20hk in 2018 and are at circa $120 currently) who took up their full allocation in the fund raise. M&g also have 13% of the shares and a few other institutions have smaller stakes.
Speculative purchase but I took the view that lithium demand will grow over the foreseeable and it’s one I’m happy to hold to wait and see.
People power - apologies done you a disservice there in my last post. I meant to tell moose it was all his fault and TCM said we had to blame him. Had just read your post asking moose a question about pivot points and clearly I got confused!
See you when you pop back RT hopefully sooner rather than later if £4.50 ish is the trigger!
Moose see what you’ve gone and done it’s all your fault!! Only joking but PP said we had to blame you ;) (nice link to the drapers article by the way we need to see more stuff like that).
Towncaledmalice, any cash call could be looked upon by shareholders as a stich up because if you don’t have the necessary funds to take part your ownership of the company is diluted.
However if you actually own shares in mab prior to the date on which they become ‘ex entitlement’, which according to the rns issued yesterday will be whenever the official announcement of the offer is made, then you will be entitled to purchase your allocation of shares at £2.10.
There’s no suggestion that P.I’s are in any way being prevented from taking part in this, if anything some existing shareholders might feel that they are given no choice but to find the funds in order to take part.
Yeah a grime against the english language!!! Only joking rag I thought it was rather creative.
Peaks - you wont get good at boxing until you learn to take a punch as well as you can throw one.
“I'm fed up with so many people who do not know the simplest of basics. I suggest to these people, learn a bit or stick with cash.”
Lti - I am fully conversant with how dividends work but the point I made in my original post was clear. I answered atanasoff’s question and explained that the total value of is holding plus the special dividend resulted in a net gain but because the consolidation of shares recalculated the avg cost per share paid it shows as a loss on his portfolio even when the special dividend is reinvested. It’s just because of the way his portfolio is displayed by his provider using a average cost per share paid.
By all means get fed up with people who don’t know the simplest of basics mate but instead of just telling people they are stupid perhaps you could try to answer their question in a way that they understand. Thankfully atanasoff’ did understand my response.
p69
''but his portfolio will still show it as a 10% loss.''
If someone bought 10,000 shares in a company at 110p per share the day before it was going xd with a dividend payment of 10p, I think you will find that on xd day the portfolio will show a loss.
I'm fed up with so many people who do not know the simplest of basics. I suggest to these people, learn a bit or stick with cash.
Duster, it’s a coin flip still as far as I am concerned. I do think we are about to enter the phase of the pandemic where, whilst I doubt we will see it plastered across Bojo’s lectern, the slogan should read go out, save the economy, protect jobs.
If we start to end lockdown and people can go to the cinema or the pub or to watch football or horse racing there will be enormous pressure on the government not to fail airlines and holiday companies as well as from the public who have been locked away and want to travel. Likewise as our friends in europe get to grips with their vaccination program there will be pressure from the holiday economies to allow them to reopen and from the Germans to allow them to travel (they love their holidays as much as the brits do).
One would hope we will learn a lot more over the coming days and weeks but I suspect we will continue to witness plenty of volatility in travel related shares between now and the first flight to Ibiza!
One thing I do wonder is whether there will be a plan to amend the school holidays this summer if there is a danger that foreign travel won’t be back on the menu until the autumn. I would suggest It’s going to be nigh on impossible to stop or fine parents for taking their kids out of school for non term time holidays given their justification will be they have become adept at learning from home without teacher supervision over the last 12 months so a couple of weeks won’t make a jot of difference!
Ynwa1 - it usually means they are the broker for the firm in question so won’t publish a view on the stock. You can look at that stance two ways a) avoids conflict of interest or b) avoids upsetting your client when you put a sell notice on the stock!!
Rag online tax is one of those no brainer ideas that makes ultimate sense, until you try to work out how you would implement it fairly.
I think it migjt have been in the times but i read somewhere that one of the businesess calling for online tax suggested that for retailers with both online and high street business rates they should be able to claim a reduction in busness rates equal to the amount of online sales tax so they do not get lumbered with both and so it targets pure online more than dual on/off line businesess.
Maybe we will see that flsgship store somebody mentioned if that happens!! Or maybe Teaco should be careful what they wish for!
Longtime there is a cost as far as the share portfolio on his HL screen is concerned.
Atanasoff purchased shares at £2.15. To keep the maths simple let’s say he purchased 380 shares at £2.15 so the cost was £817 or average cost of £2,15 per share.
After consolidation he has 300 shares so his average cost per share is £2.72 (£817/399 shares)
So with the share price at £2.40 he will be showing a loss of 10% £2.72 avg price per share vs share price of £2.40.
In terms of total value of his holding he now has 300 shares at £2.40 each so it’s £720 a loss of £97:versus his original purchase of £817.
The special dividend will be his original 380 shares x 50p so he will receive £190 which means he hasn’t lost out on the deal but his portfolio will still show it as a 10% loss. If he spends the special dividend on shares he will get another 79 shares meaning he has spent £1007 (£817+£190) on his now 379 shares giving him an average share price of £2.65 which will still show as a loss on a per share purchased basis on his portfolio against the £2.72.
The rns states that there will be an announcement once the details have been finalised and the shares will go ‘ex entitlement’ on the date of the offer.
Presumably there will be people buying shares today in order to take advantage of the offer when it comes along. A bit like they were buying into Marstons a week or two ago to take advantage of a possible takeover.