Member Info for simon1367

I imagine one of the reasons for the tie up with Hirestreet is to get customers to 'pay' for borrowing clothes for a few days, rather than what they do now, which is order clothes for a night out and then return them for free but at a cost to Asos of £6 a time.

But in respect of this huge game on Tiktok etc of asking friends ''how does this look; which one shall I send back,'' something has to be done to stop this where, in some cases, 90% of orders are returned. The company is losing big time. I still believe that introducing a 'returns fee' is inevitable to deter this, otherwise people will continue to take the mickey.

Meanwhile, I cannot see MASH doing anything regards Asos accept waiting to see what develops over the next few months. He maintains a strong position irrespective of whether the company struggles or improves. Presently, he's more interested in the 'higher end, higher profit margin' sectors of the fashion market, hence his present activities at Mullberry and Hugo Boss.

Meanwhile has anyone noticed the total shareholding of CEO Calamonte. Last time I looked it represented 0.009% of the company. Hardly a vote of confidence. Actions speak louder than words. Why isn't he and other executives not buying at this price? I don't believe they are prohibited in doing so at the moment.

All speculative rumour of course. I'm sure a few are keeping an eye on the stock. As I've said before, MASH's holding is strategic, basically a win/win for him. If company struggles he will be there to bail them out. If they improve their model and turn a profit, the sp improves and his holding appreciates. He also is hoping for increased reciprocation of retail sales on each other's sites. All in all he's in a comfortable position. I doubt he will let someone else barge in in front of him. He had that happen to him once before. Meanwhile people here are mentioning Marshall Wace reducing their exposure. Well, only a bit and there are a few other hedge funds actually still increasing their positions. As of last night the declared shorts are 5.51%....still high, and will probably hold back any big rise in the price unless by some miracle someone comes in witha bid 'now'.

Claire......Asos has a market capitalisation of about £450million. They have a large debt, and innumerable issues to resolve. They have cash to last them till about the end of the year. if Qatar make a £3billion - £4billion bid next week, I'll eat my hat.

Claire, please tell me......what is it like living in fantasyland?

Meanwhile, back on earth I have been reading what has been happening in reality. I have pasted this comment from elsewhere. It demonstrates the challenges facing Asos and the way the younger generation are costing the company a fortune. The Asos model has to change to survive:

At TikTok, the ''KeepOrReturn trend is costing ASOS huge amounts of money'' and hordes of young Generation Z influencers are busy trying on outfits for an appreciative audience of millions. In 30-second clips they model everything from swimwear, underwear, dresses and footwear, showcasing “hauls” of clothing from fast fashion brands like ASOS, SHEIN and BOOHOO. Underneath the videos, viewers post comments as to which items they think should be kept, and which should be sent back. These TikTok videos are immensely popular, commonly racking up views in the hundreds of thousands, while the hashtag #KeepOrReturn has been viewed more than 250 million times. This trend shows just how shopping habits have changed over the last 10 years. Nowadays, buying and returning masses of clothes is easier than ever. According to a recent survey from the British Fashion Council, roughly 30% of all online clothing purchases are unwanted, compared to 10% of garments bought in physical shops. More importantly online retailers like ASOS and BOOHOO say it costs them a lot of money to deal with the sheer volume of clothes being returned. ASOS recently warned it suffered a £100 Million hit due to shoppers buying up discounted clothes, only to return most of them. Although a few pieces of clothing being returned per month doesn’t sound like a lot, these returns cost ASOS at least £6 per order. Remember, this problem with returns looks set to get even worse in the coming months, due to the current cost of living crisis.

If there is someone eyeing up Asos, they must have deep pockets and face up to the serious challenges ahead. MASH holdings are a clear contender if Asos enters a distressed state.

The requirement to notify the market was reached yesterday, meaning the offloading of 4.5% probably happened around 17th . I'm guessing Fraser, and T.Rowe may have swept up quite a lot of these.

As for FinallyRetired's comment about shorters being of 'zero influence'.......I've just stopped PMSL. I suggest he has a quick chat with Chris Hohn who might put him right on a few things.

People here are either clutching at straws. Either that or trying to ramp up the shares. Karl, you may as well change your name to Claire! With the price at £4.38 on a positive day for the markets, unless there is anything other than rumours, this share is destined to drift a little downwards again. Shorts in evidence still at an uncomfortable 5.56% . Too high.

DC2007.....I concur with your view. Ashleys increased holding is simply opportunistic and not necessarily a sign he will make an offer. It simply strengthens his position strategically should someone else enter the fray. He's a bit of a vulture and rarely pays a premium for anything. He tends to buy companies nearing administration. I too think that a £1.5 - £2 billion offer is is pie in the sky. In the present climate and the precarious state of the company, I can't imagine anyone coming in with an offer in excess of £6 (and certainly not Ashley at that price). Just my opinion.

Knowbodyyouknow.......CEO's normally caveat their answers re cash raising with the quote, or something similar like, ''there are no present plans''....or ''at this time'' there are no plans for a right issue. Then come next week, blow me down, there is one! In my view, they will probably need cash within twelve months.

On top of that, even if they achieve a small amount of profitability later this year (and its a big 'if') there are more challenges beyond with a huge rise in interest payments envisaged when they have to re--negotiate their present £500 m 0.75% bond.

Frasers, through MIke Ashleys ''MASH Holdings'' does effectively already have a strategic sharehoding of 5.43%. Any increase in that shareholding would obviously be interesting but would not raise capital for the company. Believe me, as I have said numerous times before, Ashley generally enters the fray when a company is on it's knees and is fighting to avoid administration. Asos has not reached that point. Zalando is more of an interesting one. They could make an opportunist move but will probably play a waiting game like Ashley

I have often questioned the management of this company, many of whom are the same and have been promoted within. Yes they have appointed a few new people with a view to helping the company see through the cost savings strategy.

Again I suggest this company was largely rudderless for two years and completely lost its way. Each time I've mentioned these things, I've often been lambasted on here for being a shorter or for not knowing what I was talking about. To my mind it's not rocket science. For example, what fast fashion online retailer would deem it sensible to buy advance stock leading to an inventory worth something like a billion pounds. In a fickle industry like fashion where products go out of fashion in months, it was inevitable that there would be a big write down. Most people on here could have worked that one out.

Finally at the beginning of this year the CEO et al miraculously announced they were on there way to identifying £300m of savings........just like that! What were they doing before? And what do we get with the update....a 10% decrease in sales and a continuation of an unacceptable amount of returns costing them a fortune. Well I hope the new measures will indeed cut costs and improve margins. But by increasing prices (which they have), customers turn to cheaper retailers (Shein etc) and revenue drops, which it has.

Asos' online model is stuck in a hard place and it needs smart and innovative management to sort it out. I no longer have faith in the present lot, given we are supposed to have here a growth stock, but what we have is reducing revenue, and a share price that has dropped from £60 to £4 in two years......that's over 93% down. Some shareholders must be sick as a pig with this.

HappyInvestor.......how on earth do you think a cash call would be good for the share price? Any rights issue inevitably devalues your shares, plus of course one has to stump up the cash in the hope things get better (or not pay up). Some people don't want to potentially throw good money after bad. You can see from the present share price what happens on the rumour of a rights issue. This share never seems to fail to disappoint.

It was bound to bounce back a bit today.

Yesterday Asos blamed shoppers who frequently buy clothes and return them, for their losses widening to nearly £300m. They say a particular 'cohort' of customers was costing it an average of £6 for each order they made, as well as buying and returning more frequently, and returning more frequently than the average shopper. CEO Calamonte said some customers order 2 or 3 times a month and return as much as 90%. About 6% of their customers do this, and have a 'disproportionately negative impact on profitability'. He suspected that pressure on household finances was prompting the returns.

I hope they in the course of successfully changing their business model, because their survival is at risk otherwise. I say this because there are other things on the horizon. Even if they manage to turnaround the business and move into profitability (which could take a year or two), there's the £500million bond facility that will need to be renogotiated in about 30 months. That was issued at 0.75%. Even if present interest rates level off, they will be lucky to renew the facility at say 5%, and they may may need more. So we're talking of £25m to £30m of annual interest payments which would eat into any profit they made.

At the present price, it may be worth a punt if you're looking from the outside, possibly to may a quick profit on a good day, but other than that, this share will probably continue to disappoint. Existing holders like myself are in a dilemma. Is it time to walk away? I expect many are averaging down. Good money after bad? I don't know. On balance I think I will simply hold and hope for a takeover. The problem there is that the likes of Ashley often only come in when a company is in an extremely distressed state. Asos isn't at that point yet.

Re my last comment, and after reading ShearClass's views (which largely reflect mine), I had forgotten the refinancing situation they will have to contend with in about 30 months time. Was there not a 5 year convertible bond of £500m taken out around this time 2 years ago, much of it already drawn already? This was taken out at 0.75% I believe. If interest rates stay as they presently are, any renegotiation in a couple of years time will be much higher. Even if it was renogotiated at 5%, that would be £25m interest p.a, taking a chunk of any profit seeing to come through by then. It's going to be a long journey.

AI4x....I can relate to your predicament. If you're prepared to wait a long time, then I believe on balance that the fortunes of this share will turnaround through improved market conditions, efficiencies and/or a takeover. But in terms of a real improvement, we're talking a couple of years I reckon. Others who are thinking of buying for the first time at this low price, might be able to make a quick profit although in the next few months I see this possibly drifting lower.

The results were disappointing. The market reacted accordingly. Asos tried to put every positive spin on it but many saw the reality. UK Sales down 10%, sales trends still downwards in March and April, a high risk of a further inventory writedown (imo), an increasing risk of a cash call ( free cash outflow this year predicted at £100m), and an increasing number of brokers viewing this company negatively given the numerous difficulties it still faces. Asos is between a rock and a hard place. It needs to improve margins (partly by increasing prices, and partly by buying on an overall cheaper basis). This risks customers moving to more efficient competitors (like Zalando). But it also needs to continue or increase discounts to get rid of increasingly stale stock. Quite a dilemma.

I continue to be wary of the people at the top. Yes, there have been new appointments, but the now CEO (and others) for example, should have previously identified those £300m of savings that are supposedly now on track. All I really pray for is a takeover before a cash call.

nperi......thank you for highlighting the 'Zalando' factor. I hadn't noticed this when I made my last comment and it was clearly a key factor in Asos's shares dipping. I should have spotted this. My apologies.
Zalando's own corporate site puts a very positive spin on growth and increased profitability although the markets for some reason were unimpressed. Anything other than super news is looked upon as failure these days which is shortsighted and unfair in my view. Hopefully Asos can report similar progress.

Johnie5x .....I have the same suspicions as you. Some sort of leak about the update is clearly a possibility. A daily drop of over 7% in my eyes indicates something other than a lot of 'disruption in the markets' as someone has suggested.
I remain sceptical about all the savings the company suddenly identified earlier in the year. I suspect that some progress has occurred but other factors may have affected the speed of the process. I really do hope there is not a cash call as the market would certainly not welcome that. It could prove a huge setback for those shareholders looking to get their money back in the next year. My fears are this has further to fall and that shorters will repeat their game all over again.

I've been monitoring this share for a while with a view to entering at an opportune moment. However, the company never ceases to disappoint. Down 57% this year. As a 'growth' stock it's also down 57% over 5 years. They have started to (correctly) focus on the UK market rather than losing a fortune in the USA. In that latter respect, any person with some common sense could have told the management from the start that the USA's taste in chocolate is entirely different. Now, they seem to be struggling to get it right in the UK with ongoing supply issues. However, at some point this has to be a recovery play (ignore today's spike). Buy on weakness.

Brad Smith being unprofessional and throwing his toys out of the pram. Microsoft too used to getting their own way. Only reason he said that was being now face a big pay out if the deal doesn't go through. EU an easier place to set up business? What a load of rubbish. You just have to look at the amount of new tech investment in the UK compared to the rest of Europe combined, to see that's not true.
As for TBLD, I'm encouraged by the slight turnaround. Still a bit concerned that this business is somewhat of a one man band, but lets hope the overhang of shares is now resolved. Still not happy that there has been no explanation where the large sales eminated from.

Broker Liberum lifted its price target on Asos on Tuesday to 700p from 500p and maintained its 'sell' rating as it sees "significant" risks in the strategy outlined by the group to improve profitability and remains unconvinced it will be able to fully deliver on those promises. "Although we note that consensus estimates remain conservative and our forecasts for FY'24E and FY'25E are ahead of consensus, the balance sheet remains stretched. As a result, there remains significant risk that, in a plausible downside scenario, the group may need to raise further cash from the equity market at a significant discount to current share price which keeps us from going any more positive on the stock."

What with rumours of Shadowfall (known as the dark destroyer in the shorting world) possibly having a short position just under 0.50%, this is a precarious development. I just hope that CEO Calamonte's attempted 12-month turnaround plan which focuses on so called “decisive, short-term operational measures to simplify the business” is working. Anything other than a positive update in May will see this share falling I'm afraid.

A lot of manipulation going on with this share. Without any update in the near term about progress re the promised cost savings, I can see the positivity waning. We continue to see the shorts controlling things. Since mid February they've gone up from 3.86% to 5.47% and I see a repeat of what was occurring last year. Long term, the prospects are more promising. For newcomers I suggest buy on weakness short term to make a quick profit. For those already in, it's a matter of hoping that these savings, that they suddenly saw they could make, are forthcoming.

Charlie156.....interesting figures on Morningstar. Some look accurate and others are inexplicable, such as Premier, who they imply still retain 8,607, 717 shares (4.22%) as at 31/3/23 , whereas on Tinybuild's website they are no longer mentioned as of 8/3/23.
I'm comparing ownership details on three different websites. Some make sense but others don't. I mean. where is Franklin Templeton on the Morning Star figures......they apparently own over 11million (5.7%) and not mentioned, and, as you say, Netease with nearly 13million (6.3%). Weird.

It is irritating that shareholders are unable to easily find a true and accurate list of main owners of these shares.

As I think ShearClass mentioned before, Premier Funds sold their holding of the company (8,607,717 shares) sometime between July '22 and 8/3/23. I'd hazard a guess that the sale was on 7th February but cannot be sure.
During the same period, Franklin increased their holding by 2,580,930 and Amati increased their holding by 2,028,000 leaving, in theory, an overhang of about 4 million shares. Even if this occurred on 7th February, it doesn't seem to tally with the volumes on that day.

My afterthought about the CEO's comment about being eager to buy more shares in his company is why, when he already holds 37% ? It doesn't really make sense unless he wants to take it back under his control in which case there would be some unhappy institutions and shareholders. If he hasn't done so already, I'm sure Luke Burtis would want to reduce his holding now he's standing back. On that basis alone I can see this sp continuing to drift downwards. I have a relatively small amount invested but have been stung before with this type of operation. Someone please remind me not to invest in IPO's again on the basis that most private investers get shafted in favour of the institutions who bought in at a fraction of the price.

Investors Chronicle are still seeing this as a 'buy' .....but then again they have been supportive all along together with Questor who tipped them at £2.50 !!! The present price is tempting to average down, but given my reservations, I will 'hold' on the hope some cash rich American games business comes in to acquire it.