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dELİA*s AŞ Message Board

  • b.beads b.beads Sep 17, 2009 9:47 AM Flag

    Looking forward to growth

    I've been to the store in OH..they were swamped with customers. I'm looking to see dlia fly high as soon as the economy gets back in shape.

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    • After liquidating all my trading positions I unloaded everything else but 3k as all of retail is coming back.

      I have readjusted my new entry back to 2-2.05 although I may hold off depending on overall market.

    • Any ideas on what is happening with DLIA? All other retail keeps going higher or getting bought.

    • Critical mass in my estimation is where they can start building stores out of cashflow without the cash balance continuing to fall.

      The depreciation number is building, so even though GAAP earnings may be a time off, if they can continue to open stores (with landlord concessions built in-if the store isnt cashflow positive rent goes down, etc) I think they are getting to what I call critical mass.

      My complaint about inventory was the buying miss they suffered in the millions last year. That is still winding through this balance sheet and financial statement.

      Believe me, you and I are similiar investors in terms of value. But if you look at the retailers in the space starting with Chico's, Cache, Coldwater, Wetseal, Bebe, Hott, etc almost all are starting to move back to what I consider the low end of historical valuations.

      What that tells me is this might be one of those times where you look back and realize we have a retailer selling near its cash level, with a certain number of stores, an internet line, etc. and I didnt get the trigger pulled.

      I wont say we cant go back to 2 or lower esp since this can be thinly traded at times. The general market could also create havoc. But I do want to start getting a position as we move into the cashflow generating quarters of this business.

      I have bought this three or four different times this year on pullbacks to two and sold off around 2.60-2.8. This time I want a position and trading position so I want to be a little aggressive.

      Thanks for the reply.

    • No way of knowing how far it will pull back. I won't buy unless it's under $2, but that's related to my style of investing. I'm way more focused on what I could lose than what I might gain, so my eyes are on the balance sheet. I consider this a balance sheet play and a good one at around $2.
      That's not an original idea. I think WT was looking at it that way a long time before I was.

      I don't know much about inventory. I know it was rising faster than sales as BK pointed out but then again you need to look at comparable retailers and see what's going on with them. I think life sucks for everybody right now. I just think its a shame all these new stores got built in places where the housing market was the most inflated. Their performance is not very good, not as good as the stores they held onto, but better than the ones they closed fortunately. But the new stores have been a disappointment to me. I wish they would have eased off the gas a little on the buildout but oh well, whats done is done, you have to hope those stores will start performing up to par (with the stores they kept) when the economy improves. I don't share your belief that the business is close to any critical mass right now, not sure what numbers you base that on, its just another struggling retailer right now BUT I think things will gradually get better & you'll probaby be rewarded for buying here if you hold the stock for a few years.

    • My daughters and wife like this store which is what got me interested. It seems to always be busy in Annapolis, Md...I bought the stock because that's what Peter Lynch would do. I remember when my wife and kids came home one day with these ugly, ugly shoes called...Crocs.

      • 1 Reply to jped320
      • dlia -sales per square foot comment. breakeven sales per square foot is always a moving target as it is determined by margins and variable cost. Sales per square foot are good for writing pro formas though as one can write a break even analysis with general numbers such as sales per square foot so long as they are hedged by some safe percentage. for instance if sales per square foot are running at avg 300 square foot and you calculate a break even on 280 square foot then you are headged most reasonably irrespective of miniscual margin fluctuations.

        changing subjects though. DLIA still trading at or around 2 bucks and been doing this for a while. I would think that the stigma of penny stock status reflects poorly for overall store image and at this point i would reccomend name change and i would broaden my product to a wider audience as it is clear that the demographics that DLIA shoots for are not working for DLIA's stock price - no revenue growth.

        Remember this saying: Sell to the masses -eat with the classes
        Sell to the classes - eat with the masses

        ( no substitute for cash flow )

        p.s. amazed that Boston and Wave still post here- guys best of luck to you and good luck with this if you are long. I just popped in to check up on old plays....

    • Was everything on sale?

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