Troubled apparel retailer dELiA*s, Inc. (DLIA) surged +18.81% early in the day. The company, which has been in the Tiger Global portfolio since the fourth quarter of 2013, has had a tough year, with its price dropping nearly -80% YTD. Late last month, company executives said they would start to explore strategic alternatives, including a possible sale or merger.
I keep reading that mergers are pending so I threw my weight into this and bought some. Anyone have concrete news on this or is it just smoke and mirrors?
There is no good outcome. If they meet LY sales with normalized margins they still lose $4-5m and it's a stretch to get to those numbers. Tracey team has performed poorly with sales and margins below prior teams. I don't see any positive reasons for anyone to buy in. What bothers me most is this team has been paid very well and including Tracey's recent $326,000 bonus and the teams $125000 retention bonus. I don't buy it as a pittance nor do I see lower gas prices helping teens buy more.
Sentiment: Strong Sell
We have gone thru a stretch of the worse times for the average American families. I understand your point. Specializing in brick and mortar may not may not boost revenue as someone who specializes in driving online sales. Connections in the industry to facilitate a sale may be their best asset.
The point is this group didn't do a good job during their tenure in fact they performed poorly compared to those that came before. Why reward people with that kind of performance? They stand to make even more if there is a buyout. Bigger question is can a buyout turn this around? Overhead is too high, store count too low, mall traffic is down, fickle teen market, and a crowded field. Another White Knight?
Sentiment: Strong Sell
I have been waiting for DLIA and watching it for quite some time, and InfinityStockPicks finally sent out a message about it. Up a little under 20% and holding for some more breaks. Go google them and get their alerts.
A pittance for cooperating with a company looking to buy them out. Lower gas prices has the greatest affect on families with teens. The extra money in their pockets should bolster teen spending this holiday season. Retail should benefit making this company much more attractive.