Really detailed and compelling analysis on this controversial company. I got interested in ASOS when I read about Nick Sleep's fund that allocated - maybe - a large chunk of capital (sold part of Amazon and bought ASOS and that was for me a very strong/tough decision!).
Governance still not convincing and to me this is the weakest link to a clearer and more solid bull case:
1) What's the role of the Danish largest shareholder in the appointment of the new CEO? Unclear. And again on this, they apparently searched for many months a CEO and then appointed the sales director in the role. Really confusing strategy? Moreover, the danish shareholder retains a stake in Zalando too.
Hi! Thank you it's much appreciated! Some answers I could think of:
1) I don't know about Povlsens's role in the CEO search, and find it odd that he has been very close to the forced-public bid limit for years but never went all the way through nor significantly reduced his stake.
The jury is still out on the new CEO, so we will see. I'm not particularly against taking someone with company knowledge rather than an outsider.
2) I don't see Frasers Group doing much with their stake. The 5% stake is likely linked to them diversifying into other groups (during the same time they bought a stake in Hugo Boss). Buying a minority interest in ASOS makes sense given the rise of athleisure and sportswear among 20-somethings, it was ASOS's fastest growing product segment in recent years I believe.
An activist position or even a takeover with other partners is not out of the question but pretty unlikely.
3) CFO still missing is not great at all, and definitely a stain.
Really detailed and compelling analysis on this controversial company. I got interested in ASOS when I read about Nick Sleep's fund that allocated - maybe - a large chunk of capital (sold part of Amazon and bought ASOS and that was for me a very strong/tough decision!).
Governance still not convincing and to me this is the weakest link to a clearer and more solid bull case:
1) What's the role of the Danish largest shareholder in the appointment of the new CEO? Unclear. And again on this, they apparently searched for many months a CEO and then appointed the sales director in the role. Really confusing strategy? Moreover, the danish shareholder retains a stake in Zalando too.
2) What is going to do Fraser with the stake?
3) CFO still missing.
Good to stay in touch and monitoring.
Best regards.
Hi! Thank you it's much appreciated! Some answers I could think of:
1) I don't know about Povlsens's role in the CEO search, and find it odd that he has been very close to the forced-public bid limit for years but never went all the way through nor significantly reduced his stake.
The jury is still out on the new CEO, so we will see. I'm not particularly against taking someone with company knowledge rather than an outsider.
2) I don't see Frasers Group doing much with their stake. The 5% stake is likely linked to them diversifying into other groups (during the same time they bought a stake in Hugo Boss). Buying a minority interest in ASOS makes sense given the rise of athleisure and sportswear among 20-somethings, it was ASOS's fastest growing product segment in recent years I believe.
An activist position or even a takeover with other partners is not out of the question but pretty unlikely.
3) CFO still missing is not great at all, and definitely a stain.