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I boohoo (LSE: BOO) share price has risen almost 14% in the past month. So maybe that endless slide from 2021 is finally over in stock. If so, investors will be looking for evidence of a change in the underlying business – which could drive further share price gains ahead.
Early signs are encouraging
The good news is that the company appears to be putting the building blocks in place for recovery. So it might be a good time to open a business now that the November price hike has caught our attention.
But what is behind November’s stock price performance? Well, I think one of the most important things is probably bohoohoo announcing the appointment of its new CEO.
In October, Group of Frasers made a failed attempt to get Mike Ashley cast in the role. Ashley is the majority shareholder of the Frasers with a majority stake in bohoohoo.
However, on November 1, bohoohoo announced the appointment of Dan Finley to the top position, immediately.
Finley has been promoted from within to chief executive of Debenhams, boohoo’s “growing fast” digital door store.
Deputy chairman Alistair McGeorge said Finley was human “outstanding” a leader in the new generation of digital marketers. Before Debenhams, he had a track record “Phenomenal” success in internet marketing within 10 years with JD Sports.
I think a change at the top would be good for most businesses. New managers often bring enthusiasm and determination. So Finley’s appointment could be the start of better times to come for the boohoo business.
A new strategy
Following the news, the company released its half-year report on November 13. In that, Finley revealed his bohoohoo strategy. He said that in the three years he worked with the company he changed it to Debenhams “a profitable business, with a bright market place”.
“We have had great success with Debenhams,” Finley said, and now he’s looking to extend that to the rest of the business.
Then on 18 November, the company announced that it had received a total of £39.3m in revenue from placements, subscriptions and acquisitions.
Finley said the funds will support the business in its next phase of growth. However, in December, the company announced that it had paid off £50m of its bank debt.
However, in November, boohoo introduced new management, new finances, and a new system – all good ingredients that have the power to initiate change.
However, there is still a lot of risk here for new shareholders. First, the business is still fragile and is losing the widely reported challenges that depressed the share price in the first place.
In addition, there is a constant threat from competitors such as the fast-moving Chinese business Shein and others.
But the low situation in the stock has stopped for now. Developments in November and rising stock prices are important. So I think it’s a good time to be interested in bohooo again.
Like other investors, I plan to monitor the company’s progress and increase my research with a view to considering the stock for my portfolio.
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