Member Info for ragtrade

Weather and Trend drive sales, expect a poor July on seasonal stock, unfortunately we tend to see the Weather improve as the kids go back and as the AW stock hits down !!

That said inventory is under control here now, costs massively down, manufacturers are scrabbling and fighting against each other to keep there machines ticking and with less orders around this is resulting in better margins for the retail trade, it's a buyers market.

At the fashion driven end of the market a big swing towards casual trousers away from Denim, which has become staid giving consumer no reason to buy, this bodes well for AW.

Rannesbit- They have already pretty much booted out the old guard and its many incumbents, over ordering has been going on for a hell of a long time in the hope it would fuel growth, when all was dandy in the World they got away with it but it has been a ticking time bomb for years. Until recently the buying and merch teams were clueless as to where their stock even was, let alone when it would hit the DC, this was not a new problem, no visibility as to when goods will hit the warehouse has been going on since the inception of Asos, it always staggered me that this was never addressed, its fundamental to stock control. Arcadia (RIP) had the best shipping and allocation system, they new from the moment of handover the exact location of each order and P.Green (residing on Lionheart in Croatia at mo i think ) i believe used to say we have DC's not warehouses because he didn't want stock sitting in cartons, he wanted it in the stores not lying around a warehouse. I am very please to say that as of the last few weeks everyone finally has visibility of inventories and accurate intake dates, sensible planning, essential to any business at that forefront of fashion, can now take place. I was starting to be a bit worried about Jose but i think the guy is very sound and smart, he may not be the same smiley back slapper as previous CEO but he appears to be keeping this ship very steady through some very rough seas that were inherited. The Sample Sale site is a great example of a very very good move yet so simple it speaks volumes that none of the other management teams executed it.

Allegedly feeling the pinch, not sure if its true or not but he has a large boat he is selling at a knock down px.

Sorry Lynn not Link piece

T4G , i read the Link piece y.day and thought what a dreadful article it was, really lazy and no u/s of the industry, a 61 year old commenting on what the 13 to crica 30 year old wants and pigeon holing all aspects of multi faceted online fashion business's into one box, that said he is a journo and they aren't answerable to anyone with real knowledge. A better angle would have been to use what u/s he does have of the financial markets and a balance sheet to say whether MA could actually buy any of these companies or if he is just having a punt and what his strat might be. He could pass comment if distracts Frasers from their current business by biting off more than they could chew ect etc. The whole article reminds me of Dads and Grandads wearing Superdry on the Beach in St Ives thinking they are cool and down with the kids!!!

Test and repeat is not some holy grail it has been around for years, it also only works on trend driven fashion, plus even trend driven brands have basics that dont require test rpt. BH has a whole raft of Brands that dont require it not least Debs. Asos require it dome areas and they do adopt it, Turkey tho the quickest source has become horrendously expensive.

Asos biggest issue by coumtry mile was massive demand after covid and buying big volumes and expanding lines on offer which became then became a iron yoke due to container issues, war, inflation driven spending squeeze and Russian market collapse. Result massive massive inventory position. BH have managed this far better but not because of test repeat but whole myriad of reasons.

Im a supplier, i have insurance in place, lots of oversea factories have government backed schemes , Asos buy fob from us , direct from source, anyone landing goods into UK then selling to Asos maybe facing difficulties but not for us , we trade normally and i think this statement especially about stock is 1000000% correct, i also think Jose is not to blame for this, its an inhertied problem that started some time back.

@Drapers

Online sales looked to be on the road to recovery in May, though overall numbers still declined compared to this time last year, according to fresh figures.

https://www.drapersonline.com/news/online-sales-get-bank-holiday-boost

Everything i hear what your saying about Marks.

We are seeing a generational shift, the 30, 40, 50 guy and to certain extent woman is being drawn in by a great buying team at Marks, i think the more elderly Marks customer who complained about not having there old cashmere jumper in every colour and size is moving on and in more ways than one !!

The new teams there are focusing on following the trends and ditching old basics in favour of good quality new ones, so it's a mix of safe and slightly more edgy wider offer and always in the back of customers mind they think value not just because of price but also quality.

They are stepping on the toes of Next, one to watch for sure.

Knowbody-Yes it should ! and on a positive note seasonal unlike some is still on full price with little promo.

So yes it should should should be on same message.

Trade is currently not good across the whole fashion sector, rise in rates now really biting with more to come (seriously hope not but fear the worst) middle market is suffering and clothing competing with going out, keep hearing growth but everyone i speak to from housing to retail to etail to car purchases and hospitality all down, one fashion manufacturer in Leics saying in 30 years of trade never known it so bad.

I seriously hope that Asos update is on previous message because i am aware that April and May were very difficult.

@Drapers

Footfall across UK retail destinations fell by 5.2% last week, compared to the previous week, when it had risen by 3.8% following a sunny half-term break, latest data shows.

Goes without saying, massive week coming up for Asos, fashion trade for the last few weeks has been pretty shocking (on positive note weather last few days is starting to help) , let's hope that this is expected by the markets and is built in, if there is any negative deviation from the last ugly update then all hell cud break loose, one thing for sure costs are continuing to fall, we just need a slight uptick on trade against last forecast to give a bit of lift, if it goes the other way then i think all bets are off as to where Asos ends up and with whom.

PP1 plse match the Brands which u feel compete against each other within Inditex v BH group

Lest we not forget that Amazon also does Fashion, in fact it has a whole buying team in UK, it's doing ok and whilst it does compete with many existing players there is plenty to go round. Go back just 5 years and see how many retailers have now vanished, if anything the competition now days is less than it was 5 years ago let alone 10, BH alone holds a whole stable of once pure retail Brands all no longer available on a High Street near you.

Pedro i said if suppliers were desperate , i said times were tricky for BH as they are for most, if the yanks cannot agree on the debt ceiling and US bonds start to default then we will go from tricky to desperate and will probably go back to the Stone Age Hunter Gatherer type of living.

Pedro , wishful thinking i'm afraid and it 1000000000% doesn't lead to higher prices, what it def does is make you think as a supplier is i'm not that desperate, if you have the option to move on you do, if you don't then you need to get your house in order and not be so reliant on so few accounts.

This is not confined to BH and it's not confined just to fashion industry, these guys would not be doing this if they weren't in distress you cannot blame them they are fighting for every penny, sit back at your peril or try and dictate by being aggressive, this is exactly what they have done and look at the results compared to Asos, sitting on a bit of cash rather than a predicted 60m debt. Kamani has got off is a*** and put himself at the coal face, one he knows all so well, he's gone out to do battle because he cannot trust his minions in such tricky times to do it for him. I kinda like it but it's only correct for here and now whilst all the sh*t is flying around, when things become come calmer we need to see some sort of renewed buying structure back in place, right here right now the guy is out there punching not sitting around a table telling but out there showing what needs to be done, still 30% very very very punchy LoL .

Might be off interest to one and all, i've redacted some parts, needless to say we asked a few questions as it was a very narrow mail lacking any detail whatsoever about which Brands, response was vague, we never went, LoL

Our Chairman, Mr Mahmud Kamani will be in **** ** **** and would like to meet with you at his hotel.

Please ensure samples are brought to the meeting and have pricing ready to discuss.

Time of meeting: ****

Location:

Please wait in the hotel lobby.

Please confirm your appointment on email.

Pedro, there is always someone who is desperate to make, tbh i'm unsure if this is playing out across all Brands, they never give a detailed breakdown for revenue across the group but with BH/PLT being main drivers the short lead supply route is key, if they really want to keep a factory then they will sit down and try to come to a compromise, ask for 30 get 10, old skool but in current climate it is probably what's needed, only BH really still have the mentality desire to do this as this is how they started and with Kamani a helm i suspect this is what he really gets and drives him, doing a deal, John L also a bit of a trader from his early days. Back in 90's you would get major High St buyers lining up all main suppliers in reception, they would come out and go i have 500,000pcs to place for delivery in next 4 months, i will call you in one by one for your best price, many retailers still do this on basic product but it's done on line with blind bids. Currently its a buyers market, suppliers are not dictating margin, rarely do, buyer gives target and normally you will reach compromise, if you cannot reach and cannot compromise they move on to someone who will.

Biggest issue as a supplier is if you take a key volume line to keep factory flowing with a guarantee for next 6 months production you have had to work on low margin or even cost in some cases if fty is desperate, then buyer comes a long and sticks in a retro you are in a loss, or they can cancel back end of order as sales are slow, in this case you are left with empty production and the fabric , they are at least liable for this.

Just to correct WolfofWarks, my evidence is not anecdotal and also i don't work for ex supplier, with my business partner we own 2 factories in Asia trading for last 19 years, previous to that i did work for various companies around the World supplying the UK fashion market, been in this business over 30 years, all my working life.

As T4G pointed out at this stage it is unclear how many suppliers are targeted for the 30% which i have to say is outrageous given that margins are nowhere near that high, i can say that 10% is deffo the min that's being imposed even this is 3 to 5 times higher than the normal smash and grab.

Pedro also just so you are aware in 2019 Asos intro'd a 3% discount retro and extended there payment terms, they said it was to "fuel joint growth" in 2022 they again intro'd a further 2% retro mentioned sharing the inflation burden and again looked to extend credit terms.

I continue to work with many retailers here and overseas but due to risk v reward on such small quantities we took a decision 6 months ago to back away from BH.

I do own shares in BH.

T4G yep I concur 👍