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Read through the concall and I’m absolutely confused on how they’re notiching up 100+ days of receivables when the terms are 7 days for EBOs (COFO & FOFO) and 45 days for LFS. COCO should be 0 days. These 2 channels are >50% of the sales. So I really don’t understand how one can have 100+ days of receivables!
It sounds odd to me but across the board, retail model is FOCO - which is asset light… here this company is trying to do the opposite - what is even the point in owning the stores? what matters to the consumer is experience (CX) which can be adequately controlled via the FOCO model
All of the above perhaps reflect in very cheap valuations.
2 Likes