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billddrummer

billddrummer
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  • The Wild Oats grocery chain could launch itself again with a little help from Ron Burkle who is rumored to be close to buying Fresh & Easy stores in the U.S. from Tesco (TSCDF.PK). The investor could also house Wild Oats in A&P and Pathmark stores, according to the buzz. Once upon a time Whole Foods Market (WFM) tried to buy Wild Oats, should it be worried about its possible resurgence now? [View news story]
    In my region (Reno NV), Wild Oats occupied a 17,000 sf store across from the city's largest Best Buy store.

    When WFM took over Wild Oats, the company opened in a 49,000 sf space approximately .5 mile south of the Wild Oats location, and shuttered the Wild Oats store.

    (That space remained vacant for more than 5 years. It's now occupied by a 99 cent store--which sells produce and frozen foods as well as the normal 99-cent store stuff.)

    To ease its entry into the Reno market, WFM hired many former Wild Oats employees, including the store manager.

    The transition was so successful that the individual who spearheaded the integration was subsequently promoted to manage new store openings nationwide. (I confess a search for a story about this was fruitless.)

    The performance metrics for Wild Oats were dismal compared to WFM:

    http://bit.ly/11cP7wG

    Sales/sf at WFM were double Wild Oats, despite having significantly larger locations.

    The resurrection of Wild Oats within A & P and Pathmark stores seems doomed--from what I remember, many of those locations are in lower socio-economic areas that wouldn't attract Wild Oats customers in the first place.

    The game, however, is afoot!
    Jun 13 07:20 PM | Likes Like |Link to Comment
  • Netflix: Dismal Owner Earnings, Priced to Plunge [View article]
    NFLX lost me as a subscriber when they unbundled streaming and DVD delivery.

    Looks like I've got company.

    Meanwhile, content costs continue to skyrocket while subscriber revenue flattens.

    Not a compelling reason to buy the stock unless you use put options, or go short.
    Jun 13 06:59 PM | Likes Like |Link to Comment
  • Struggling To Get Ahead: The Age Demographics Of Weekly Earnings [View article]
    Manufacturing is not coming back to the U.S.

    The workforce commonly classified as 'manufacturing workers' has been steadily declining for the past 50 years, even as output per man hour has exploded.

    It is true that the cost of production is higher in the US than in other countries. But did anyone seriously think that as other countries developed their manufacturing capacity, that companies would not take advantage of lower cost structures and friendly regulation?

    What the US excels at now is creating wealth through knowledge. Peter F Drucker dubbed the modern American worker as a 'knowledge worker' who managed ideas rather than 'things that hurt if dropped on your foot.'

    This trend has accelerated in the last decade, to the point that being a production worker has become an anachronism--and those workers who remain are more likely to use technology daily, to improve their...productivity, thereby reducing manufacturing jobs even further.

    Just because one doesn't like the direction the train is headed is not going to keep it from its destination.

    I expect this trend to accelerate further in the coming years.

    And those who are unprepared will be left behind.
    Apr 25 12:43 AM | 1 Like Like |Link to Comment
  • Struggling To Get Ahead: The Age Demographics Of Weekly Earnings [View article]
    Compelling data, thank you for the article.

    It's interesting to note that the 65+ cohort has determined that its lifestyle has begun to depend on continued employment--unlike a generation ago, when 'retirement' meant leaving the workforce for other pursuits.

    With the slow drumbeat of inflation eroding our purchasing power every day, it's no wonder that older Americans have no choice but to work.

    Thank you again for an illustrative and sobering article. Looking forward to more contributions.
    Apr 23 03:20 PM | Likes Like |Link to Comment
  • Today's Market News To Trade On: 5 Stocks Moving On News [View article]
    So do I.
    Mar 19 12:48 AM | Likes Like |Link to Comment
  • Today's Market News To Trade On: 5 Stocks Moving On News [View article]
    I got over it.
    Mar 16 02:47 PM | Likes Like |Link to Comment
  • Best Buy's CEO Discusses F4Q13 Results - Earnings Call Transcript [View article]
    I am frankly surprised that only 14 more 'large format' stores are up for closure during the coming fiscal year.

    I expected the number to be materially higher.

    Oh well, time will tell whether the slow approach proves worthwhile.
    Mar 3 01:10 AM | Likes Like |Link to Comment
  • The 'De-Bestbuyification' Of Consumer Electronics [View article]
    I would have to agree with you.

    BBY began introducing Pacific Sales SWaS (Store Within a Store) to capitalize on high end appliance buyers. These designated appliance areas are usually located in larger (40,000+ sf) outlets that already have Apple and Magnolia stores.

    The idea is that the higher end buyer (formerly Barry and Jill, from the company's 'customer-centricity' purchasing demographic profile), can stop in one place to satisfy all their electronic, home entertainment and appliance needs.

    (Please see the comment below which further explains how BBY separated its buying groups.)

    http://bit.ly/YB82Nt

    I say 'separated' because immediately after Mr. Dunn became CEO, the customer-centricity program was dismantled.

    In any event, it is clear that transformation is vital to the company's future.

    The question becomes, will transformation occur rapidly enough to save it?

    Disclosure: Long BBY with shares purchased through the company's ESPP.

    Former employee.
    Feb 27 08:09 PM | Likes Like |Link to Comment
  • Oil is set to fall by 30% this year, says Levitt Capital's Robert Levitt. The impact of increased shale oil supplies have been drastically underestimated by the markets, Levitt says. This increase, when combined with the resolution of pipeline transportation issues, should ease upward pressure on oil prices. "Once we have all these issues straightened out, the price of oil is going to come down and that will be a great boom for the global economy." [View news story]
    There's already $4 gas in Northern CA.

    This morning I passed a gas station that posted prices for regular unleaded at $4.009 for cash, $4.069 for credit.

    This afternoon, the same station showed $4.069 for cash, $4.129 for credit.

    Where's the relief coming from?
    Feb 16 12:47 AM | 4 Likes Like |Link to Comment
  • Today's Market News To Trade On: 5 Stocks Moving On News [View article]
    I believe BBY is on its death bed.

    It's going to pass from a lingering, wasting illness.

    Which flies in the face of those who believe the company's ultimate demise will be dramatic and swift.

    I think the company will drift into irrelevancy over the next 5 years, until an electronics reseller takes over the remaining locations and turns it into the equivalent of an Electronic Dollar Tree.

    In the meantime, look for further closings of marginal locations in your local town.

    Disclosure: Long with shares purchased through the company's ESPP.

    Former employee.
    Feb 16 12:39 AM | Likes Like |Link to Comment
  • Best Buy's Buyout Blues [View article]
    Back in the day, SA had a Dislike button.

    It's a shame they removed it.
    Feb 3 12:01 AM | Likes Like |Link to Comment
  • Best Buy's Buyout Blues [View article]
    I tend to think that with the company's online price match policy during the holidays, the gross margin were compressed, while the SG & A margin rose because of flat sales and higher operating expenses.

    Result? Lower operating profits.

    Operating profits at $1.53 for the quarter seem to represent the upper end of the range to me.

    $1.25--$1.40 seems more reasonable.
    Feb 3 12:00 AM | Likes Like |Link to Comment
  • Best Buy Sales Not What They Seem [View article]
    I think it is amusing that a company with same store sales declines of 1% considers that kind of performance a win.

    It will be interesting to see what the full-year operating results will be.

    And what FCF will really become for the year.

    I, for one, think FCF will be less than $400 million.

    Which will leave precious little cash for restructuring unless the company borrows it.

    Now, there is ample availability on the currently unsecured credit line.

    But I wonder whether this is the same path Circuit City took--borrowing to restructure, which ultimately doomed the company.

    Disclosure--long through shares purchased in the company's ESPP.

    Former employee.
    Jan 14 10:06 PM | Likes Like |Link to Comment
  • Conversion, conversion, conversion: A quick scan of the performance of some major retail websites shows the biting criticism of Best Buy's (BBY +0.5%) online business may be well-deserved. The company only converts 31% of its visitors into a sale compared to the 81% of visitors at Amazon.com and 76% checking in at Apple's site that actually buy something. Comparing the retailer's sales per physical space to brick-and-mortar peers yield similar disappointing results: Best Buy $865 per square foot vs. Costco at $1,031 and GameStop at $1,015. [View news story]
    What is AAPL's sales/sf?

    Oh, found it--$6,050/sf, twice that of Tiffany's

    http://bit.ly/13flXwF

    That takes specialty retail to another galaxy.

    And oh by the way, does AAPL qualify as a BBY peer?
    Jan 8 08:05 PM | Likes Like |Link to Comment
  • Conversion, conversion, conversion: A quick scan of the performance of some major retail websites shows the biting criticism of Best Buy's (BBY +0.5%) online business may be well-deserved. The company only converts 31% of its visitors into a sale compared to the 81% of visitors at Amazon.com and 76% checking in at Apple's site that actually buy something. Comparing the retailer's sales per physical space to brick-and-mortar peers yield similar disappointing results: Best Buy $865 per square foot vs. Costco at $1,031 and GameStop at $1,015. [View news story]
    This is why I took a dim view of BBY crowing about how its website was one of the top 5 visited over the Black Friday weekend.

    Visits aren't sales, as is clearly shown here.

    I was actually researching some flat panel TVs but found two thirds of them out of stock at the website.

    You can't sell what you don't have.

    They apparently learned their lesson from last year, when they did sell things they didn't have--and had to disappoint customers at Christmas time.
    Jan 7 09:04 PM | Likes Like |Link to Comment
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