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  • Town Sports: Despite Problems, Tremendous Upside At Current Price  [View article]
    To anyone considering buying Club stock: be patient and wait until the new board articulates a turn-around strategy and hires new CEO. With CEO's resignation today, old team that championed the HVLP (should stand for "high volume low profit") is gone, and there's a greater opportunity for fresh thinking and leadership.

    Still, turn-arounds are extremely hard to pull off, especially in multi-unit service business, and can't think of any in the club industry. But I hear Patrick Walsh has been successful in the past in other industries, so at least the lead investor has experience to draw from.

    Stay tuned.
    Jun 18, 2015. 12:43 PM | 1 Like Like |Link to Comment
  • There Is Irrationality And Then There Is Town Sports International  [View article]
    Existing clubs may, or may not, be capable of producing EBITDA. Increases in competition, and changes in what customer is looking for in a fitness experience, may well have "impaired" many clubs. Also, Club assets are single-purpose, and real estate is leased, so if they don't work as clubs, they have very little value.
    Aug 18, 2014. 04:36 PM | Likes Like |Link to Comment
  • There Is Irrationality And Then There Is Town Sports International  [View article]
    Fitness club companies aren't valued based on club replacement cost. They're valued using multiple of future cash flow. Problem with Club is that EBITDA is in free fall - down 40% YTD (Q1 and2) vs PY. Where's the bottom?
    Aug 7, 2014. 03:37 PM | Likes Like |Link to Comment
  • There Is Irrationality And Then There Is Town Sports International  [View article]
    Yes, better than Bally's, but not by much. Not sure if/when Club will see 20% margins again. CLUB EBITDA Margin around 13% in Q2/14, and company guided to 11% for Q3/14. Margins will remain under a lot of pressure as membership/rev falls and costs rise. Revenue losses weren't caused by recession - many fitness consumers, urban and suburban, have gone to low-priced competitors and speciality boutique fitness studios. Mid-priced, traditional clubs - like Club - are losing members and don't have pricing power to fall back on. I understand why they're re-positioning many suburban clubs and rolling out new concepts to compete better for the "new" consumer, it just seems like those measures are desperate and don't play to their strength. Doesn't mean there's zero chance of success, just that odds are very long at this point. And Bally's did the same sorts of things as it was sinking.
    Aug 6, 2014. 02:17 PM | Likes Like |Link to Comment
  • There Is Irrationality And Then There Is Town Sports International  [View article]
    It's deja vu all over again - Club in the Bally's death spiral. Chance it could be saved by strategic buyer, like 24Hour Fitness (now run by former Club execs), but price won't be pretty. Stay away from this one
    Aug 5, 2014. 05:07 PM | Likes Like |Link to Comment
  • I'd Buy Lululemon On The Earnings Dip  [View article]
    Guiding to 8% combined comp (stores and e-comm) in Q4. Not too shabby - and not many retailers will get to that level. Self-inflicted wounds will heal. Buy as a core holding.

    I heard quality control at the "front end..." - i.e., in the factory... but "back end" much funnier
    Dec 12, 2013. 08:00 PM | Likes Like |Link to Comment
  • How Charlie Munger Followers Could Have Avoided The Folly At J.C. Penney  [View article]
    JCP saga seems like Darwinian capitalism. It's a dodo bird. Not sure when JCP will take its last breath - could be a long ugly death spiral and fodder for many more comments - but this is a company that has very little reason for being. Foolish and hubristic for Ackmann/Johnson to think they could change this retailer's march into oblivion.
    Apr 11, 2013. 03:40 PM | Likes Like |Link to Comment
  • J.C. Penney (JCP +3.5%) CEO Ron Johnson "deserves criticism", according to Bill Ackman, who has been an outspoken fan of the embattled CEO until now. Ackman's Pershing Square Capital has lost ~$500M on paper from its investment in JCP thus far. Although the retailer's execution has been "something close to a disaster," Reuters says Ackman wore socks purchased from J.C. Penney as he criticized the company.  [View news story]
    Silly and won't fool anyone, but Ackmann trying to avoid accountabiity and evade the taint of failure. Board and exec team will be jointly responsible for the failure (or success) of JCP's transformation. In fact, Ackmann has as much or MORE responsibility than Johnson, since he handpicked Johnson, and more than likely crafted strategy with Johnson. I'm sure he and the board signed off on the big bang approach. Sounds like typical hedge fund investor whining.

    Ackmann should just shut up and stay the course, or change strategy and change execs. Starting to remind me of George Steinbrenner RIP..
    Apr 7, 2013. 11:50 PM | Likes Like |Link to Comment
  • Just before Bill Ackman engaged with Carl Icahn in the financial media equivalent of the Thrilla in Manilla, the investor had something to say about J.C. Penney (JCP -0.2%). Ackman expressed confidence in the leadership of CEO Ron Johnson, but gave up a little ground by conceding if the exec doesn't turn things around in another two years then he's probably the "wrong guy" for the top job at the retailer.  [View news story]
    ...or maybe Ackman's grand strategy for JCP is the wrong strategy...
    Jan 25, 2013. 03:51 PM | Likes Like |Link to Comment
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