Good morning, it's Paul here with the SCVR for Tuesday.
Estimated timings - sorry, I nodded off mid-morning, having had a poor night's sleep, so am running a bit behind schedule. I should be finished by 3pm. Today's report is now finished.
I hope you enjoyed the long weekend. I made good use of the time to spruce up my flat a bit, which has gone to rack & ruin during lockdown. This year, my entire focus has been on covid, and trying to work out what on earth is going on with the markets, hence I had overlooked the fact that home had become an increasingly cluttered (buying stuff on Amazon all the time), unkempt, pigsty! It's slightly better now anyway, but won't be winning any Ideal Homes awards for the foreseeable future. As mother put it, "It's very you!"
Boohoo (LON:BOO)
I see the Guardian has really got it in for Boohoo (LON:BOO) with a couple more damning articles published on Friday, causing a plunge in its share price (I hold), before a rapid partial recovery. I'm amazed that repeated revelations about its supply chain are still having any impact at all on the share price. It's been known for decades that the fashion sector has a murky supply chain. Practically every garment that all of us have ever worn, will have probably been made by someone being paid very little for their labour, irrespective of whether it's cheap fast fashion, or high end designer clothing.
I've seen some ridiculous commentary from journalists & analysts who clearly don't understand this sector, speculating that BOO's profits are built on sweatshop labour in the UK. Hence profitability would collapse once suppliers are forced to properly pay minimum wage. This is nonsense. Even if the allegations are true that some of BOO's suppliers only pay £3.50-£4.00 per hour, this would still make UK production high cost, compared with overseas. The reason UK factories are used, is speed to market, and convenience (e.g. designers/buyers at BOO can check production samples by jumping in a car and inspecting production themselves).
As the Guardian suggests, BOO is apparently already moving production to suppliers overseas (Morocco and Turkey have been mentioned), which are cheaper production areas, because wages are even lower than in Leicester, and lorries can bring the product into the UK at reasonable cost & speed.
Hence…
