Specialist
Former International Director at Boohoo.com UK Ltd
Agenda
- Logic behind Boohoo's (LON: BOO) acquisition of Debenhams and Arcadia's assets
- Implications of shift to wholesale model and growth opportunities in new categories, including the scope of the beauty expansion
- Integration challenges and margin dynamics
- Additional M&A scope in UK and abroad
Questions
1.
How would you characterise Boohoo’s M&A strategy? What are its key considerations when acquiring a brand? What do outsiders need to know about that strategy?
2.
Boohoo recently acquired Debenhams, as well as some of the Arcadia assets, Dorothy Perkins, Wallis and Burton Menswear. What do you think was the logic behind these two acquisitions?
3.
What do you think the department store strategy with regards to the Debenhams acquisition tells us about Boohoo’s aspirations to move towards a marketplace model vs the existing wholesale model?
4.
Debenhams has a number of brands it worked with before the Boohoo acquisition. What is the likelihood that these brands will continue to work with Debenhams online when it’s owned by Boohoo? Let’s take beauty, sport and homeware?
5.
Boohoo has been trying to branch into beauty for a while. What do you think have been the challenges in doing that organically?
6.
You said it’s highly likely that beauty brands will stay with Debenhams online, but what do you think the outlook is for third-party brands that operate on the Debenhams platform, knowing that it’s owned by Boohoo?
7.
Do you think there is a sufficient number of brands already within Boohoo to launch a marketplace model?
8.
If the core of the Boohoo business moves onto the Debenhams URL, what sort of brand dilution could there be, operating among other brands that aren’t necessarily well-suited for each other?
9.
How do Boohoo’s most recent acquisitions improve its competitiveness vs Asos or Shein for the 16-25-year old customer?
10.
What aspirations do you think Boohoo has to compete with omnichannel retailers such as Next or John Lewis?
11.
Does the Debenhams acquisition indicate that Boohoo wants to compete more aggressively with Next, John Lewis or even Frasers Group online?
12.
Could you outline the core Debenhams customer and the core Dorothy Perkins, Wallis and Burton customers? How do they differ from the customer groups that exist within Boohoo?
13.
How can Boohoo ensure that its acquired brands’ identifies are retained while also tapping into the broader Boohoo machine?
14.
Asos has acquired Topshop, which firmly sits within the 20-something category, while Boohoo is trying to widen its customer base. Why do you think these different strategies are being applied? Which do you think is stronger?
15.
What do you think is the risk of broadening the customer demographic within Boohoo’s acquisition strategy?
16.
What is the cannibalisation risk across the new brands within Boohoo, if we also consider Karen Millen and Coast? Where do the highest cannibalisation risks lie and how could they be offset?
17.
Do you have any further thoughts about the newly acquired brands and who they’re directly competing with in Boohoo?
18.
What do the acquisitions of Karen Millen and Coast tell us about how quickly Boohoo can ramp up a brand onto its platform?
19.
What do you think are the greatest integration challenges?
20.
Asos has said the Arcadia Topshop brand will be separated into a different team that functions outside of the Asos design. Do you think Boohoo will pursue a similar strategy?
21.
How is Boohoo likely to approach restructuring the supply chains of its newly acquired brands?
22.
How do the acquisitions impact lead times? A key part of Boohoo’s strategy is to have very fast lead times to adjust to customer preferences.
23.
We know Debenhams and the acquired brands from Arcadia target a different customer group that’s a bit less fashion forward than the traditional Boohoo customer. Does that imply longer lead times for the newly acquired brands?
24.
How do you think the new acquisitions could impact Boohoo’s margin profile, thinking about growth and EBIT margins?
25.
How does growth in beauty through the acquisition of Debenhams impact the blended margin?
26.
How is the marketplace model likely to impact Boohoo’s margin profile?
27.
Boohoo notes that within the Debenhams Group, roughly 25% of the GBP 400m revenue generated was from the fashion marketplace. How large do you think this fashion marketplace could grow in terms of sales penetration once it’s part of Boohoo?
28.
How large do you think the beauty category could grow? I know it was 20% of Debenhams online revenues.
29.
How can Boohoo approach cross-selling beauty from third-party brands through the Debenhams website into the core Boohoo customer demographic?
30.
What ramp-up in marketing spend do you expect in order to optimise the cross-sell opportunity or customer acquisition opportunity?
31.
How do you think the newly acquired brands could help Boohoo with its international expansion?
32.
What is the strategy of going direct vs through retail partners when it comes to international expansion in the US or western Europe?
33.
How sustainable is Boohoo’s D2C strategy in the US vs relying on a marketplace platform to get brand recognition?
34.
What are the margin implications of growing in the US?
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