The Boohoo Group PLC (LON: BOO) share price has fallen 37% in three months as investor sentiment towards the fast fashion company turned sour amid an industry-wide downturn. However, despite the significant downturn, Boohoo is well-positioned for a recovery.
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Earlier today, the company announced adding one more name to its list of recommended directors for Revolution Beauty Group. The company had already recommended Alistair McGeorge and Neil Catto but added Rachel Horsefield as the third director today.
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Investors barely reacted to the news, as evidenced by the sideways trading witnessed in Boohoo shares today. The markets were more focused on news that Mike Ashley’s Fraser’s Group had bought a 5% stake in Boohoo worth £22 million as part of a recent spree of buying activity.
The acquisition of the Boohoo stake comes after Frasers revealed that it had acquired a 21% stake in online electricals retailer AO World as part of a strategic partnership and a 10.6% stake in Asos for similar reasons.
Frasers has been hunting for new investments in the retail sector after acquiring ‘I Saw It First’ and Missguided over the past year. The recent moves could not have come at a better time, given that most retail stocks are beaten down and are trading at a fraction of their all-time highs.
Boohoo remains well-positioned to capitalise on a recovery in the retail fashion industry, given that it is currently building a massive US facility to improve the delivery times for its US client orders currently shipped from outside this crucial market.
The company has also taken steps to ensure that its supply chain is transparent and that there is clear visibility of how it sources its fashion products. As mentioned in previous articles, Boohoo’s work on its supply chain following the Leicester City sweatshop scandal will pay off over the years.
The company’s leading global and US competitor, China-based Shein, does not offer the same visibility and could lose out to Boohoo over time. Therefore, Boohoo’s prospects remain promising, making it an attractive investment.
*This is not investment advice.
Boohoo share price.
The Boohoo share price has fallen 37% in the past three months. What’s next for the fast fashion company?
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