RE: End of Sep2 Aug 2020 09:58
For what it's worth, here's my two pennerth...
If you look at the accounts for Boo over the last few years we have seen huge increases in sales and profits, they also have little debt. They have taken over Oasis and Warehouse, and I would suspect may target other retailers.
Someone said that people aren't buying clothes because they can't go out: I can tell you now, by the amount of deliveries I get to my house every week that firstly people are buying clothes and they are going out... my daughter isn't going out out but is going to small garden parties and both her and her friends want to dress up. Equally, Boo does not sell only going out clothes, and people are buying ordinary day to day clothes.
By comparison, the high street seems quiet but online sales are still strong, and I suspect that this trend will continue as we go trough various lockdown measures.
So, all of these positives, let alone the discount that this share seems to be trading at; lets look at the negatives:
Yes, sales will have dropped this year, that's inevitable, but is it always to be this way?
Yes, they have been slated for using the "sweat shops" but firstly it's still not completely clear as to the situation here and secondly are they the only ones?
As well, even if the investigations prove that they were in the wrong, will it really stop the likes of my daughter buying? They are low cost clothing providers and as such for those with little spare income they will still be doing business. I think the affects of this are likely to be short lived... I seem to remember Adidas had a problem many years ago for using sweatshops... they're still here!
In summary, I believe the current price is good value, the business fundamentals are good and an increase in SP longer term is inevitable. Sentiment is lower right now as people question their ethics but in my experience, these thoughts are short lived as long as Boo does something positive.
Have a great weekend all and of course DYOR
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