Member Info for Pmoran1969

Southcoast - I agree. The problem is it really is that simple if you are running a business from your back bedroom or are a shop keeper tapping into additional customers through eBay. But as soon as you want to become a ‘proper’ business and serve customers countrywide and beyond that’s when it starts to get complicated and invariably expensive.

Sufc - I own dividend payers in my portfolio and if boohoo ever gets to the point where there is genuinely no more growing to do (or offices to buy eh Dan) then I’ll happily let them pay me 4% divvy a year just for holding the stock but there’s a lot better use for profits presently than handing them back to shareholders. Although if they were a dividend payer there would be some bright spark who would argue the one positive over the last week would be how much the yield had gone up!!

Dan - I hadn’t considered the ‘secret sauce’ whilst talking about being an online retailer is not as simple as it might first appear but I agree the data side of the coin is invaluable if the data is used effectively. And one thing boohoo have proven to us is that they know their customers and can react to their desires so I trust that they will continue to build and utilise that wall of data effectively.

Once boohoo are satisfied with their warehousing situation be that in the U.K. or elsewhere and they understand what additional capability they have over and above their own growth requirements and any planned acquisitions I wouldn’t put it past them to make their fulfilment and return expertise available to third parties (at an appropriate cost of course). It seems to me to be a logical extension of the Debenhams market place to offer the entire service of housing (housing not owning) stock, dealing with order processing payment fulfilment and returns for a customer that has a product or brand but not the right infrastructure to do the direct to customer at scale.

Sufc - online selling is indeed an open window to every man and his dog but it’s not actually that simple.

Southcoast posted earlier about primarks point blank refusal to go online because of the affect on margin and resulting increased prices to consumer.

Abf know full well that online shopping has been on the increase and there has been a comparable decrease in high street shopping but they are determined that online is not the route they want to take preferring being the best at their price point on the high street and being one of the bricks and mortar businesses that they believe will survive and therefore thrive as the competition fall by the wayside. The board have been challenged by analysts, shareholders and customers about their no online approach but they have made it clear that to go online would be cost prohibitive.

Having a desirable product is fine and one could argue that in the case of primark they already have a strong enough brand that they wouldn’t have the high cost of marketing that a new entrant might and let’s face it setting up a website is easy enough and setting up the appropriate sales and payment processing isn’t that much of a challenge either. However the whole direct to consumer fulfilment and returns process is where the challenge lies particularly if you are successful and are required to handle significant numbers of orders and expected returns (returned products have to be checked, repacked and returned to stock and the customer refunded accordingly).

For an existing retailer without online presence to do this would mean either significant investment or utilising a third party to provide the service and for the likes of primark who work on tight margins that is not doable. For a lot of smaller companies and startups using the likes of Amazon has been their route to online and most recently next have also got into using their fulfilment and returns expertise to provide that service for others.

The likes of boohoo or asos are already there as far as the order fulfilment and returns processing are concerned and that still provides them with an advantage over any man or his dog attempting to do the same. Don’t get me wrong there will certainly be competition and the boohoo’s of this world will have to keep moving and keep innovating to gain and retain their share of the market but for low cost relatively low margin fashion setting up and being profitable online is not as simple as it might first seem.

It’s 3.40am Saturday morning and serious cramp has me awake and in the kitchen with the dog (waking the missus up would not be conducive to having a good weekend!). It doesn’t seem like that long ago that 3.40am would have me in the kitchen with the dog because we’d just got in from a night out and my inability to sleep wouldn’t be due to bloody cramp!! But hey age Halle s to us all I guess!

There’s only so much golf short game reading material out there to entertain and theres only so much preparation I can do for york and Newmarket before the exchanges wake up so why not check out lse and see what late night early morning ramblings (apart from my own) there,are.

And wow what a gem of a post from salmac.

Anyone who is invested here using leveraged CFD’s or spread bets or has ‘borrowed’ the mortgage money to make a quick buck and is in a blind panic then by all means pray to whoever your god is and hope you’ve called it right (long short or sideways). But if you are invested for the long term and you are sinking or seriously underwater having averaged down a few days ago then I think salmac and the other sensible heads (streets and knowbody spring to mind off the top of my head) are absolutely right just play the long game and watch everything settle and then turn around because we know it will.

I am guilty of responding to kallu on many occasions because I simply can’t be doing with his methods instead of letting him just be the cleverest in the room (until he discovers the hard way that he’s not) but I don’t think I could have summed him up as accurately as you have salmac.

I shall check back later to enjoy his bullet pointed response to your post and which part of it he chooses to pick out to add to his ever growing list of boohoo negatives but in the meantime great post salmac and I hope any slightly nervous investors (and speculators) glean some comfort from it.

Kallumama just when I thought you couldn’t get any more ridiculous.

“The only truly independent director I have known who puts others benefit over his own is Jesus Christ”

I fear you may have lived through more than 3 recessions if you knew him!

@dan

Interesting take on all of this but not sure it’s me you want to respond to given I didn’t ask you anything!

Like I said kallu for all your claims of years of experience and knowledge you seem to lack understanding of certain aspects of how a business is run. The role of an independent non Executive director gives a fairly big clue as to who they are accountable to in the title ‘independent’ ‘non executive’.

Perhaps you could find a book that explains it to you and then you will be able to wow us with your expert knowledge by quoting from it as well as from the Charlie munger book you once read!!

I am not comparing boohoo with Amazon. I merely provided you with an example of one of the many companies that survived the dotcom bust. You see kallu things are not as basic as you like to make out.

You have this binary view of the world where you seem to think either high street or online will survive and the other will therefore cease to exist. Then you try to back up that view point by citing examples such as Amazon are opening stores because they see that online is dying!

You make comments such as abf will not be as affected by things such as hgv driver or other staff shortages because they can move people from their food businesses to their primark businesses. It is just made up y you and whilst you might think it’s logical and that facility is available to them it simply is not. For starters abf shift a lot of their raw material and finished product using hauliers the same as most manufacturers. Like other companies they do employ drivers to move product from warehouses to shops and to deliver to customers and some of these are hgv class 1 drivers driving abf tractor unit’s and pulling abf trailers but the vast majority of movement of product from factory to warehouse utilises haulage companies and it’s those haulage companies who are struggling for drivers and that affects everyone. Ultimately if haulage firms start offering higher wages to attract drivers that could result in abf having to pay their own drivers more to keep them.

The idea that you can take someone who works in a factory or bakery and send them to work in primark is just daft. Do you think abf has a factory or a warehouse close to every primark outlet they have? Do you think they can simply instruct someone employed as a line operator in a factory that they must now go and work in a warehouse or retail store?

You claim to have a number of years investing experience but your comments suggest that you are somewhat naive when it comes to understanding how a business and in particular a business you are invested in operates. Perhaps you should think about Charlie mungers rules and ask yourself whether you have understood and applied them to your own investment.

Kallumama I remember the dotcom bubble bursting quite well. There were an awful lot of loss making companies out there valued on the profit they might make in the future and there were an awful lot of shareholders who got badly burned. But not every online business around at the time failed many survived.

I seem to recall that there was a relatively young company about at the time that shared it’s name with a certain South American rain forest. I’m pretty sure it not only survived the dotcom bubbles spectacular burst but it thrived somewhat!!

Pedro - one of the latest media reports concerning Leicester manufacturing related to a factory where an employee claimed that they were being paid minimum wage but were forced to pay a portion of their salary back to the factory manager.

It turns out that the factory owner was appalled by this and when he was able to prove that it was happening he made sure the employee was paid back and the manager was sacked. It also turns out that other employees walked out in support of the manager and claimed they were not having to pay part of their wages to him and both the manager and the employees who walked out are now working at another Leicester factory that has nothing to do with boohoo.

Interestingly enough boohoo found out about this through their whistleblower program rather than the press and it was highlighted in levesson’s latest update.

If the press continue to seek out this type of malpractice in Leicester and continue to find out that such things are not happening on boohoo factories they will either end up going after the local council or hmrc or anyone of the official bodies who are supposed to be eradicating such practice or they will end up proving that boohoo have got its act well and truly in order.

So it will be interesting to see if the press are truly concerned about the plight of individual factory workers in Leicester in which case they will continue to report such things or whether they were only interested when it meant they could go after boohoo.

Ragtrade - I get your point but in fairness if kamani was going to parade himself round the streets of Leicester naked whilst walking on broken glass then surely he would have to be stoned? I know I would!! ;)

Kallu - are you suggesting that boohoo have significantly reduced their guidance for the full year? You may rhink theu will miss current guidance by a long way and ultimately have to issue further guidanve at or bwfore the next hpdate to tbe market but theu have not as yet. So what exactly is it i have to learn apart from the fact that you cannot remember the bs youve spouted in the past and cannot answer wby it does t quite correlate with your current tales of superior investment knoqlwdge?

Kallu I wasnt expecting anything I simply stated that if boohoo were going to significantly miss their advised growth and margin targets they were obliged to update the market. They have not changed their full year guidance significantly and were therefore not obliged to issue any form of update.

Now are you prepared to answer my question about whether you actually believe the bs you type? A few weeks ago you were claiming to have been sitting on a loss of several years salary with you pfd investment because they dropped dramatically in price yet now you say you purchased in 2015 when the share price was broadly at the same price it remained for the next 5 years.

Of course when you own some 4 million odd shares in a business even small changes to the share price can make or lose a significant sums so what was it kallu did you lay out circa £4 million to buy your 0.5% stake in pfd or was it closer to £2 million? And do you really beleive what you type?

Kallu - he survived the vote because 59% of shareholders voted for him to stay at that point. You may have supported oasis who owned 12% of the shares but Nissan owned over 25% of the shares at the time of the vote and they, along with other shareholders voted for the ceo.

Oasis claimed pfd was a zombie company. Did you agree with their assessment given you supported their campaign to oust the ceo? Because all of your previous rantings about your fantastic knowledge and contrarian investment strategy and your beloved Charlie munger tests before investing in a company claimed that whilst everyone else thought pfd was a zombie company you did not and you saw the value of holding the shares!

‘In my previous investment we even got the ceo changed!’ Of course you did kallu, you led the vote to remove the Darby did you? Or did you just vote for him to go? And did he go as a result of the 41% vote you refer to because my recollection was that he actually won that vote and stayed on for a period.

Last week you were lording it up because while you were invested everyone else was saying pfd was a zombie company but you knew better because you had applied Charlie mungers tests and knew it wasn’t a zombie company yet now you tell us that you got the ceo changed and were the only the 4th company in the last decade to get more than 40% vote against the ceo. A vote which was instigated by none other than oasis an activist shareholder who claimed that pfd was what? A zombie company!

Well by your reckoning I will either have engineered the sale of Morrison’s or saved it from falling into the hands of a private equity firm depending on which way I vote in a week or so!!

Do you actually believe the stuff you type on here and more importantly do you actually think anyone else does?

“ I told you last week this would happen and was told i no nothing’

Yes Juney you did. But I’m sure you will forgive me for not taking financial advice from someone who isn’t aware of the difference between know and no!

Although looking at today’s share price perhaps you would argue we should ‘of’ listened to you anyway!!

Dan Jl was asked about progress with Debenhams and he said something along the lines of he reckons beauty is about 25% of brands stocked and that will move up to 5”% in the next couple of weeks or so and he also stated that they had partners already on market place but expect a similar increase in the near future too.

They made a point of mentioning the plt resell that they plan to launch nt recall anyone picking up on that in questions so whilst boohoo think it’s a fab idea I think that one slipped by the analysts.

Oh yeah but John did confirm that they are chartering their own flights in order to bring in stock!

Dan - I thought you had gone into airplane mode to avoid the open!! Update was usual performance kamani stuttered a welcome and carol was her usual stilted presentation style with jul and nc delivering the meat of it all and fielding most of the questions.

Underlying theme from JL was that with new brands and debenhams they can dress everyone from 16-50+ and available customer base rises from 100m to 500m. He was asked about euro distribution centre and answered that he sees that happening down the road along with a second us one. Both he and nc reiterated their view that freight costs and higher wage costs being experienced currently are definitely short term. Hl cited example of lower passenger planes to us meaning the proportion of that plane that was open to freight wasnt there thus pushing up cost. Nc was asked why didn’t they simply raise the cost to consumer to protect margin and the answer was down to remaining competitive while continuing to grow the market.

Much was made of how apparel market is down in U.K., us and europe but boohoo market share has increased (doubled in U.K. and us and up 50% in europe).

I think boohoo plc are making a recording of the presentation and a copy of the slides used available later today so probably worth a look.

I was left with the overall impression that the board are simply looking forward and following their plans and that they expect revenues and profits to grow accordingly even if profit is under threat while they build Debenhams or warehousing or absorb some marketing or freight cost.

So for the shareholders it’s a case of do you trust what the board are trying to do and are you prepared to ride out whatever share price volatility there is in the interim.

Nothing in there that made me want to sell up just yet!?

Danny boy clearly I digested these results slower than you (have to get the coffee machine and the ecig fired up before I can face the sudoku in the times never mind financial numbers!) but the us warehouse was the first thing that jumped out at me (after the year on year growth of course).

Too fast? I was expecting your first comment to be a new us distribution centre opening in 2023 was acceptable but too slow!!

I think we have to accept that there are cost and margin pressures that are affecting all businesses and the unknowns of the next 6 months throw up challenges to anyone issuing market guidance. However I would like to have seen boohoo raise expectations rather than stick at the growth numbers already issued.

That said there’s a lot that I like in this update as an existing share holder (including new us distribution and the number of times JL can say scaleable platform!) let’s hope Mr market feels the same way. As usual I guess we will learn more about the analysts sentiment from the q&a session that will follow this mornings presentation and more about mr markets view in about 5 or 19 mi utes time!

Kindness a couple of comments jump out to me from the initial headline summary apart from online being up 58% vs pre pandemic 2019 compared to retail down 38% vs 2019.

“the Retail bounce-back was far stronger than we anticipated. Sales in Retail stores have done better than planned, while Online sales have fallen back less than we expected. It appears that the wider economy has not suffered the long term damage many feared, for the moment at least. And, in particular, employment has held up well.”

“The combined effect of pent-up demand for clothing, record savings ratios7, and far fewer overseas holidays has materially boosted sales in recent months. The impact of these factors must inevitably diminish as time goes on. It also seems likely that increases in the cost of living, along with the potential effect of seasonal labour shortages on our delivery service, may moderate demand in the months ahead”

We are not quite comparing Granny Smiths with Granny Smiths when looking at next vs boohoo in my view but they both come off a similar tree. So we might learn something from the market reaction today.

Kallu you dug out one data that showed online sales across all sectors had risen month on. I think year on year for every single year for the last 11 years!!

Granted the month on month comparison for all online sales for June July and august 2021 vs 2020 was down by a small amount (except for footwear and apparel that showed a slight increase) but2020vs 2019 increase was abnormally high due to retail being forced to shut.