Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Behind every failed company are rich bakers. it means diddly squat. These folk get rich by exposing themselves to risk, just like us. Middle East funds have money all over the world. They are never active participants in companies - they are diversifying their national wealth.
What you are describing is dilution if this was an AIM company. Continuous funding rounds until the shares are nothing more than confetti.
'WeeWee - I would think maybe their margins are better elsewhere.
Maybe look at the rich backers they have. They keep funding Shein. I presume you haven't read my post below on Shein's rich backers. I suggest you do.'
Where? Are they doing something different elsewhere? I've been telling you all along that Shein cannot do what they do and make money. We know this from Boohoo and ASOS and we know from Primark that online and selling dirt cheap doesn't work. That we didn't know what was happening at Shein because they don't release public information, then when they do I was proved exactly right. These figures don't include a share of the central overheads either - only UK gross margin and marketing staff. You lob off their share of the HQ in China and they will be in a far worse position than Boohoo is my guess. No wonder they keep having to raise cash.
You are a very generous soul though PeePee - all that profit you gave back to the market makers. Buffet would be proud. Other than Pedro I'd be amazed if one other person believes you made £600k given how desperately you ramped this at £3+, you were clearly buying all the way up and got you are e handed to you on the way down. It's a good job SCB keeps posting reminders for anyone who might be fooled by your antics.
That's the problem when you teach a dog to bite, one day you get bitten.
PeePer - how is Shein going to get by on gross margins of 2-3% when you yourself have advised us that fast fashion needs these to be 50%+ in order to survive.
Extremely interested in your answer here. Your whole credibility is at stake here.
Beep beep this vehicle is reversing …..
No point trying to wriggle out of this one PeePee we’ve got all the other faux pas you’ve had this week on volume, inflation, etc.
Plus nobody believe you made any money on these shares as you’ve only just started going on about them. I’ve asked you countless times over the last few months to talk about your other investments.
The problem is you’re not smart enough to get away with the crap you are trying to pull.
Sorry meant in terms of evaluating both sides.
Pedro - I couldn’t agree more
‘Shein does not work on 2% margins because it has to....It is obvious Shein has a plan in the background...Or why do it?....What is that plan?.....I do not know.....do you?.....One thing that is guaranteed ...They are looking for market share....’
In reality you could say that about any company with pis s poor metrics.
Months of daily nonsense peppered on the board and then the day his beloved Shein drop a truth bomb he’s done a Shergar.
Pedro - they’ll have to competently change direction on their business model.
Ironically they’ll have to become more Boohoo and ASOS like.
Debenhams isn’t trying to be a department store though. It’s an online marketplace.
‘In terms of the market we are talking about.....!0% is .....T4g.....What do you think Sheins end game is?....‘
The capacity needed to make this worthwhile is eye watering.
I guess if they replicate it in enough countries and make a small profit in each the sum of all the parts become valuable.
It’s a behemoth of a business to run though on so many different territories for such little reward. Maybe that’s why they are looking to become more westernised in order to try and make it work.
'My guess is that Shein will evolve and margins will increase,but, that will take time...Several years...In the meantime a very,very competitive market place will sort the wheat from the chaff....The end result will be Shein domination,together with them acquiring ,or having more affiliation with the brand names....We shall see....'
Their margin will increase when the same headwinds BH are suffering subside. However BH margins will be far superior.
'Cheap low margin clothing sales have their place, won’t change the habits of the customers that ASOS mostly target where brand and reputation matters. My son is 13 and Nike have his mind already, and when you were the wrong stuff at Gen Z it isn’t cool. Yes there will be those that are fine with Shein, but there will be as many or more that are not!'
Excellent post. Much of the conversation around Shein is that there's a continuous race to the bottom, it just isn't true. They will only be able to capture the part of the market that is obsessed with price and not proposition.
'Shein will eat into BOO sales...with such low manufacturing costs,compounded by the willingness to operate on such low margins...The combination of those two things together just make the whole of the market so,so,competitive.......too competitive for a respectable margin to be made....'
This is why Boohoo are re-strategising by concentrating on more quality sales. Hence we are seeing an upping in the marketing of PLT and Karen Millen. BH isn't just fast fashion anymore, it's far more diversified.
'I am very surprised at the Shein margins. Has to put a downer on the competition......I can see no other way....They are willing to virtually give things away.....'
Hi Pedro - That's the thing what they are trying to do is unsustainable as a viable model. If they took their share of the contral overhead they won't be making any money at all. Primark have proved how to make money at this price point and it's by piling it high in store not trying to make money after the last mile by delivering it.
'I am not sure PP could exceed the stupidity of saying Mike Ashley was conducting insider trading in Boo shares by Shorting whilst buying £40M worth - there have been many to choose
However Boo having 50M returns a year knowing Boo generate £2 a pop put aside that would be 50% returns then web site sale conversion rate of 25% are possibly new entries into the PP top 10 gaffs'
Oke - You'v missed his his hilarious explanation of trading volume and his complete misunderstanding of inflation by green boxing him.
Teddy pal. It's pretty obvious he's heavily underwater and there are two or three people that like to rub his nose in that fact. So he spends all day arguing with them.
Can't wait for PeePee's analysis of these numbers once he has got of the phone to his broker for his next narrative.
I've had a quick flick though it all and this is basically their UK sales and margin. They have nothing of note in the UK other than a marketing office and probably a bit of stock in transit.
It's actually quite poor reporting by the Times as they have said nothing of their poor margins. The £80m per employee sounds amazing but the truth is the tangible employee cost will be in their HQ elsewhere in the group.
It looks like re-registering in Singapore has meant they have had to set up a proper structure and now have had to set up a UK subsidiary.
£18.1m in the bank which is their free cash flow.
Interestingly they have a vat creditor so they are making taxable supplies in the UK.
Just shows why their margins are wafer thin. I 'm quite surprised at just how bad they are.
Inflation is killing them.