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12 Comments

    • Five Retailers for Falling Gas Prices [view article]
      I have been in and out of JMBA, simply as a "low-priced" speculative play, but -- I confess -- at, abominably, much higher prices. Fortunately I lost very little. Even at that time I wondered about the proverbial "moat." I question whether Jamba has any kind of brand advantage (outside, perhaps, California).

      I've also been in DKS profitably, but I have to say that shopping in their stores (I've been only in an Indianapolis and a Tampa store) has been a despicable experience. Signage and helpful employees are in notable absence. I've resigned myself to staying with The Sports Authority, which is only marginally better, and the experience has been a damper on new enthusiasn for the stock.       Aug 15 01:54 PM
    • Time To Start Nibbling at Restaurants? [view article]
      "These companies, all of which I believe are "full-service&quo... restaurants, are hopefully an inclusive list - please let me know if I have omitted one."

      I'm just guessing that by "full-service&quo... you mean to exclude quick-service, buffet, cafeteria and take-out, leaving "casual service."

      So this might suggest the inclusion of BUCA, BWLD, CASA, DAVE, DENN, ELXS (but you get sewage equipment, which isn't necessarily appetizing, in the bargain), GCFB, GRIL, JAX, MRT, MSSR, RUTH, or SHLL. In addition ARKR operates both casual and quick service restaurants.       Aug 09 07:42 PM
    • Up Coldwater Creek Without a Paddle [view article]
      CWTR has never been an "internet only" company. They started with a mail-order catalog, and now have three so-called retailing "channels." The only internet-only public apparel retailer of which I'm aware is the loss-addicted BFLY, run by a one-time failed president of CHS, but backed by the deep pockets of George Soros. May 28 10:12 AM
    • Are Airline Stocks Cheap Enough Now? [view article]
      You say, "Airlines are a notorious black hole for capital: Even the Sage of Omaha, Warren Buffet, lost his shirt when he strayed too close."

      Wrong. Buffett made a profit on his famous (or infamous) investment in US Air, though he did berate himself for making that investment in the first place. See the excerpt below from an April 3, 2000 Motley Fool article by value fund manager Whitney Tilson.







      US Airways Case Study

      "When Richard Branson, the wealthy owner of Virgin Atlantic Airways, was asked how to become a millionaire, he had a quick answer: 'There's really nothing to it. Start as a billionaire and then buy an airline.'" -- Warren Buffett's 1996 annual letter.

      Tiger owns 23% of US Airway's shares, representing Robertson's largest position by far. To my knowledge, this is the only stock in Robertson's current portfolio that Buffett has ever owned (in 1989, he bought $358 million of USAir preferred stock). Here is what Buffett wrote about this investment in various annual letters:

      "There is no tougher job in corporate America than running an airline: Despite the huge amounts of equity capital that have been injected into it, the industry, in aggregate, has posted a net loss since its birth after Kitty Hawk." -- 1991 annual letter.

      "A competitively-beset business such as USAir requires far more managerial skill than does a business with fine economics. Unfortunately, though, the near-term reward for skill in the airline business is simply survival, not prosperity." -- 1992 annual letter.

      "Mistakes occur at the time of decision. We can only make our mistake-du-jour award, however, when the foolishness of the decision become obvious. By this measure, 1994 was a vintage year with keen competition for the gold medal. Top honors go to a mistake I made five years ago that fully ripened in 1994: Our $358 million purchase of USAir preferred stock, on which the dividend was suspended in September. In the 1990 Annual Report I correctly described this deal as an 'unforced error,' meaning that I was neither pushed into the investment nor misled by anyone when making it. Rather, this was a case of sloppy analysis, a lapse that may have been caused by the fact that we were buying a senior security or by hubris. Whatever the reason, the mistake was large." -- 1994 annual letter.

      Ironically, as Buffett was writing those words in early 1995, USAir was beginning a remarkable rise from the ashes. From its low in late 1994 to its peak in mid-1998, the stock rose more than 2,000%, which allowed Buffett to exit his investment profitably in 1997.
      Apr 16 09:26 AM
    • American Eagle Outfitters' Wings May Be Falling Off [view article]
      Beneath the numbers, let's look at the basic businesses.

      The parent chain is essentially maxed out domestically. How much promise there might be for it overseas is a question scarcely raised, let alone argued. M+O doesn't yet show much (and ANF's lack of success with its Ruehl stores, aimed at the same demographic, isn't encouraging). I visited my first M+O store last month, at the Mall of America, and was startled by stratospheric price points -- any number of triple-digit items, including a tee-shirt (okay, maybe a "pullover" at $148 (if I remember correctly). It doesn't seem the right time for it, as now configured, really to take off. Their imitation of ANF's kids division is still pie in the sky; ANF has had a checkered history with "abercrombie"... They shuttered stores in 2004 and 2005 (dropping from 175 to 161) as returns had become disappointing, only to add 17 in 2006 and 22 last year, encouraged by a string of positive double digit comps. The times being what they are, its sales have gone sour again.

      It seems to me the only really imminent prospective payoff for AEO is the aerie concept, but whether the tail can propel the whole donkey is another question.       Apr 12 10:26 AM
    • Sex May Sell, But Is It Profitable? [view article]
      Ditto to the comments about valuation and peer grouping.

      I've bought RICK at $3, $5, $8 and $20.

      Another public company is Private Media (PRVT).       Apr 07 12:04 PM
    • August Same-Store Sales Roundup [view article]
      Isn't it about time that people in the financial media stop giving respect to the "estimates" guessing game? It's bad enough when applied to quarterly earnings, but becomes absolutely ridiculous applied to monthly sales reports.

      Isn't it obvious that what matters is the change from the comparable period (or the monthly number as part of a pattern of monthly numbers for that company) or how the sales report in itself or as part of a pattern compares to that of peers, not even beginning to consider the relative impact of markdowns on the sales numbers and their implications for earnings, not what analysts estimate, with something like a 15% accuracy record.

      It is mindboggling that reviews of analyst ratings (most based on predicted earnings changes) over the last several years have found
      that the most rewarding buys are those earmarked "sell" by the analysts, the net best returns come from recommended "holds," and the worst from recommended "buys."

      This same skill when applied to same store sales finds that the list above comes close enough to the reported comp to be considered accurate in predicting the number (whatever that number is worth in isolation) for by my reckoning six (JWN, TJX, LTD, BJ, FDO and FRED), or 15%, of the 40 companies for which estimates were made.

      I've followed specialty retail, especially apparel, sporting goods and variety, closely for the last nine years, and since whenever this "estimating" disease took hold this kind of whistling-oin-the-wind inaccuracy has been the norm.

      I just don't get it.

      But this reference to variation from a "consensus" estimate is now a virtually standard reference in the lead of earnings or comp-sales related news stories throughout the financial media.

      And it is meaningless in relation to a company's prospects.

      To me it seems to be merely a fast shuffle creating more trading commissions and profits for brokers and trading firms.       Sep 07 03:19 PM
    • Jos. A Bank's Marketing Strategy Cheapens Brand [view article]
      Amen. I've owned JOSB since 2000 and it's one of my largest holdings. There's a jarring dissonance between its "Tiffany" store atmosphere and carnival-hustler marketing approach. Even some store employees I've talked with are embarrassed by it. I can only speculate whether management has considered a more "reality-based&qu... approach.

      On the face of it,my best interpretation is that it might be an attempt to seduce a more "downscale" customer into a luxury or semi-luxury environment, where he thinks he's getting a "steal," no matter how neverending the Sale!Sale!Sale! advertising pitch.

      But even that interpretation doesn't account for the TV ad placements on venues such as MSNBC talk shows, which are hardly "downscale." (If the ads are on less upscale commercial broadcast TV, I wouldn't know). Why approach a relatively sophisticated viwer wirh a "Hey, Rube" approach?

      It's a "puzzlement."...

      I have to say that CEO Wildrick, in his earlier days at the helm, took a similarly promotional attitude toward the stock, which had me wary for quite a while. Nonetheless he has delivered on the promised store expansion and profit growth, and along with it muted his style. But "carnival" may still be in his bones.       Jun 13 11:40 AM
    • H&M: The Ikea of Retail Apparel Is a Hit With U.S. Consumers [view article]
      "H&M's philosophy is..... using independent suppliers in Asia and Europe rather than running its own factories."


      (1) Name me ONE specialty apparel retailer that runs its own factories. You imply that this is a special attribute of H&M.

      (2) Your recommendation lacks any valuation or financial efficency metrics (in other words, essentially any substance).

      (3) You say H&M has "Fashionable clothes, great quality, low prices." While I'm not truly up to date, historically H&M has had a poor reputation for quality (personally I had the experience of buying a men's belt that came apart after three wearings). I grant you they have fashion and low prices.

      Your post would benefit by rising above the level of gossip.       Jun 13 11:02 AM
    • Heelys Tanks On Dilution Concerns [view article]
      "Mega-DILUTION?&q... (Emphasis mine.)

      If these shares are as described, they are SECONDARY shares, already outstanding. There will simply be a transfer of ownership. An indication of weakness based on insider selling? Very likely, allthough I've seen this apparent signal err: prime example -- one of the three founding Marciano brothers of Guess?, Inc., filed a shelf offering to sell ALL of his shares when the stock price was about $2 (adjusted for a 2:1 split). The stock never looked back and so far has topped out over $43 . One difference, GES was coming off long-term poor performance that turned out to be a bottom.

      My idea of "Seeking Alpha" contributors is that they are at least a little more sophisticated than this.       May 08 08:47 AM
    • Bad Year for Chico's, but Worth Holding On to the Stock [view article]
      Your latest comment seems to imply that the Aug.26 posting of "worst year ever" was based on the [approximately] 50% price drop in 2006. However, your message of that date was entirely about fundamental oerformance, and on that basis fiscal 1994 and 1995 were far worse than is likely for 2006. None of this is material to what happens now, so forgive me if you consider this nitpicking. I just don't like to see a misstatement that can be carried farther and so possibly in itself do damage to the stock price, especially since the postings (including your own) that I've read so far on seekingalpha are both more thoughtful and more lucid than most posted elsewhere. Dec 22 08:16 PM
    • Bad Year for Chico's, but Worth Holding On to the Stock [view article]
      I read your several CHS postings only recently, and I must correct a false statement that introduces this Aug. 26th letter. Throught the third fiscal quarter, 2006 is NOT the worst year CHS has experienced as a public company.

      It went public in 1993. In the fiscal year ended Jan. 1, 1995, net income declined from $4.9 million in the prior year to $3.3 million, and continued to decline in the year ended Dec.31,1995 to $1.7 million (also the same result in the pro forma fiscal year ended Jan. 28, 1996 following conversion to the "retail" calendar year from the standard calendar year.

      EPS declined on shares then outstanding from $.62 to $.42 to $.22 ($.21 in the pro forma year).

      Net sales per store declined from $647 to $613 to $527 ($537 pro forma).

      Net sales per selling square foot declined from $496 to $478 to $413 ($405 pro forma),

      Same stores sales went from +12.1% to -7.3% to -10.4% (10.1% pro forma).

      In the fiscal year ended Jan. 1, 1995 working capital decreased from $4.8 million to $1.5 million (rebounding the next year to $4.5 million or $5.4 million pro forma).

      Operating margin dropped from 18.9% to 10.3% to 6.0% (5.9% pro forma).

      To my way of thinking these results in what the company would now call Fiscal 1994 and 1995 do not allow 2006 to be characterized as the worst year for CHS in its history as a public company.

      I make this comment in hopes that you will amend any future "worst year" statement to fit the facts (that is, by tightening the time frame),

      I have no quarrel with any of the substantive statements made about CHS in any of the comments listed here. I've followed the stock since 1998 and owned it since Feb. 2000. I also own a large number of other apparel/footwear retailers and suppliers.       Dec 15 03:25 PM
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