billddrummer

Black Friday: Price Discrimination Doesn't Explain Everything

One thing this argument omits is the additional overhead (principally labor) needed to handle the higher shopper volume. As a consequence, the 'efficiency' gained by higher sales is somewhat offset by the higher variable costs needed to produce those sales.

It is true, however, that fixed costs/unit sold will drop relative to the higher than normal sales on Black Friday. But I for one think the discount phenomenon is designed to lure shoppers into the store to buy non-discounted product. It is common knowledge in retail that many big-box stores operate at a loss at the beginning of Black Friday, but hope to compensate for loss leaders later in the day with a normal mix of higher margin products and services.

And I also don't believe that Black Friday sales can forecast the holiday shopping season. What may be more likely is, especially if the holiday is worse than last year, is that sales will fall precipitously after Black Friday, dragging year end results down.

It will be interesting, nonetheless.

Borders on the Verge of Bankruptcy

I tend to agree with Fingeek8. A prepackaged Chapter 11 (whether now or immediately after the holidays) would allow the chain to restructure its existing leases and continue to operate. It has already struck a deal to close its waldenbooks stores after the holidays, which will save several million in cash flow.

The wildcard is whether the company can continue to get funding for its inventory through factoring, since CIT is out of the game.

But I agree that liquidation talk is premature.

Coinstar: Standing Up to Continued Challenges from Hollywood

I agree with the article.

I work at BBY, and we've seen our DVD sell-through shrink significantly for both new release and catalog titles. Even a DIS executive stated recently that consumers weren't building their libraries like they had in the past.

The BBI business model is on its way out, and consumers are seeking more convenient ways to get their entertainment fix. BBI used to be a standard stop on the way home from the grocery store. Now, with a Redbox vending machine in the grocery store, Mom and the kids don't have to make a separate stop.

Look for this trend to accelerate in the next year. CSTR plans on installing another 10,000 machines by the end of 2010, a reach that BBI won't be able to match, no matter how many kiosks they plan on opening next year.

Cramer's Mad Money - You Can Buy Pretty Much Everything (11/16/09)

The stock market is the only one I know of where people buy when prices are rising and sell when prices are falling.

Doesn't make any sense to me.

Home Depot: A Quick Lesson in How to Beat EPS Estimates

Looks like SPAM to me.

Why GM Is Repaying Bailout Money

On Nov 17 12:47 PM Jgib wrote:

> Somebody said GM has a great balance sheet. Where can I find one,
> as a stockholder. that is?

Are you a stockholder of the 'old' GM, the one with all the bad assets? That's the only one that has published financial statements and traded stock.

The 'new' GM isn't publicly traded yet. They plan on an IPO next year.

Blockbuster (BBI): Q3 EPS of -$0.20 misses by $0.09. Revenue of $910.5M (-21%) vs. $1B. (PR)

Redbox is testing tiered pricing for some movies--up to $2.50 in a few cases--and already rents games for $2/night.

But the instructive thing is that Redbox is evolving in the face of streaming video content, and BBI isn't.

Google Redefines GPS Navigation Landscape

Let's hope the search engine is better than Google Maps. I used it today for some property research, and not only did the program put the building in the wrong location (fully a city block north of where it actually sits), but the direction function didn't capture an access road built 18 months ago, that cuts 10 minutes from the directions to the property.

Since 40% of my job is property research, I expect flawless performance. I was frankly surprised at the errors from Google Maps, which I use consistently because of its (perceived) accuracy.

Perhaps I need to look for another mapping function.

U.S. Generational Shift is Key to Future Consumer Spending

And I agree with the conclusions of the article that the WMT, HOG and GMs of the world will continue to lag behind companies that recognize and respond to the generational shifts that are evident.

U.S. Generational Shift is Key to Future Consumer Spending

I agree, it's a good article.

I work for BBY in the Home Life department (TVs, appliances, gaming systems and media). I've noticed that the boomer generation has vanished from the store, and been replaced by Gen X and Gen Y folks who have bought their first home, and empty nesters who are upgrading their computer systems, TVs, and appliances.

It's almost as if Middle America isn't shopping anymore.

Homebuyer Tax Credit: Update

I'll reiterate what I said on a local real estate thread:

If this passes the way it's proposed, it will prop up the prices of higher priced homes and reduce the availability of lower priced homes--exactly the opposite of what the government says it wants to happen.

Case in point--if you buy a $150,000 house, the credit will be $7,290. If you buy a $700,000 house, the credit will be $7,290.

Extend and Pretend: The Growing Divide Between Delinquencies and Foreclosures

Something occurred to me today as I was trying to figure out how to cover my oldest daughter's 2nd semester tuition at NYU:

"Why is college so expensive anyway?"

If she successfully completes her studies and graduates, she will have more than $100,000 in student loans to repay--just from her undergraduate studies.

How much will she need to earn to pay off those loans? And if she doesn't pursue an advanced degree, what are the chances that she'll never earn enough money to pay them off?

I didn't graduate from college. I had to work. But it's unfortunate that we have saddled our children with onerous debts that may never be repaid, in the name of 'furthering their education.'

Not a ringing endorsement of the American educational system.

Consumer Confidence Crumbles

To bigbear4511,

And none of them are on medication.

The Greatest Depression Is Coming

On Oct 17 01:59 PM KirbyJF1 wrote:

> You must have been CHICKEN LITTLE in a previous life. What a bunch
> of boulder dash.
>
> Kirby

That would be balderdash.

I haven't read all the comments, but the article makes some excellent points. I tend to think that most middle class Americans have come to grips with the grim reality that their children's futures will be materially worse than theirs--the first time in American history that parents expect their children to achieve less than they did.

A new study finds a disconcerting trend in bankruptcy filings: More than 50% of small business bankruptcy filers were current with one or more of their lenders when they threw in the towel. The speed and silence with which they're going under is deeply worrying to lenders, who historically have managed default risk by closely monitoring delinquencies.

That's happening in personal bankruptcy cases as well. I'm familiar with one case in which the debtor was current on all his debts, yet filed bankruptcy and discharged $98,000 of unsecured loans and credit cards.

None of the lenders had any inkling because everything was current.