fcharlie

Two Bright Spots in Economic Darkness: TD Ameritrade, Sears Holdings

The Kmart layaway plan is for 8 weeks only. It's not like someone can put a winter coat on layaway and pay 2 dollars a month and then stop paying in summer and screw Kmart. A $5 fee just for using layaway can mean an extra 5% margin benefit if someone uses layaway to purchase a $100 item. KMarts gross margins are UP. This will be two quarters in a row they are TRENDING UP. There's also a $10 cancellation fee, payable up front and non refundable even if you miss a single weekly payment. Layaway is a great idea for many. Probably not the people reading the Seeking Alpha boards, but for the MILLIONS of people living week to week with no credit or maxed out credit cards, I'm sure many new customers were created, or pulled back in to Kmart because of layaway

Paul Price, you seem very confident that SHLD is going lower, possibly to zero. You say the "shit will hit the fan". Can you outline this scenario? I don't see it happening. What are you building into your assumptions between today and 18 months from now to cause the bankruptcy filing?