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  • big.yank big.yank Feb 19, 2011 1:20 PM Flag

    Blockbuster, Borders & Britney... WAG's Future Shock!

    What a pity that senior management at Walgreens just can't quite seem to grasp the lessons of history. To wit...

    Blockbuster: A high-flyer, dominant in the home video rental business, caught all the movie theatre chains with their pants down. Made $ billions for Wayne Huizenga and early investors that grabbed the brass ring. Opened new stores, EVERYWHERE. You might even say, "willy nilly" new store growth in a grabbag for market share and real estate dominance. CONVENIENCE was their ticket to the future. Sound like anyone you know?

    Now, fast forward 20 years to today where new competition capable of delivering the same product for way less... Netflix, Red Box... have eaten Blockbuster's proverbial lunch. Just like mail-order will do to the Rx market, perhaps?

    Borders is a more recent fatality in the willy nilly race for store count growth and domination. It's just that Border's executives never quite comprehended the impact that Amazon, mail-order and internet-delivered written content like Kindle and Nook might have on all those new, brick-and-mortar stores of convenience that they built. Sound like anyone you know in the retail pharmacy business?

    Lastly, the Britney Spears episode is funny, and all, but it carries a lesson along with the levity. When you run a chain of pigsties with filthy restrooms and cameras hidden in the restroom ducts to eavesdrop on employees and customers going potty, you create a REASON to use mail-order for prescriptions and to simply order online from Drugstore.com and the many other providers that ship right to your door.

    But you Waggies just keep opening all those new stores...

    Bwahahahahahahahahahahahahahahahahahahahaha!

    Tata,

    Yank

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    • Maybe somebody in Deerfield with a brain read my message of Feb 11 and actually did something.

      I actually think WAG underpaid for DSCM. This move actually radically impairs Rite Aid, IMHO. And it connects Walgreens to AMZN who owns 18% of DSCM. You can't keep better compamy in the on-line space.

      WAG got some great management and some strong niches in specialty beauty and vision care out of this deal. And the pre-eminent domain name out there. That's the plus side.

      On the more questionable side is DSCM's largely debt-free balance sheet which means, unlike Duane Reade, there is no quick fix for their immediate profitability problems.

      ivan needs to consider the logic of profaning DSCM's management which has a royal pedigree and VERY expensive legal talent at their immediate disposal. That's another word to the wise.

      Tata,

      Yank

    • Big Yank believes strongly this Executive management team of Walgreens is ineffective in dealing with the new dynamics in Retail competition.

      He has made some very good points when he is not bashing.
      I like many others look at the competitive landscape in this sector and have witnessed Rx erosion from Mail Order, Supermarket competition and limited provider networks.
      Convenience as a business plan is justified when picking up a 6 pack or chewing Gum, however when a family is dealing with the High costs of medications and therapeutic treatments, decisions are made and financial resources are allocated to pay for these services.
      The days of the Insurance Company picking up the Bill are disappearing for the general population.

      The Growth in this Sector has come from Technology, Innovation and financial commitment to the Core of a companies business model.
      An example is Express scripts or Medco.
      Neither has a Retail brick and Mortar operation.

      90 day maintenance Rx refills will likely impact retail traffic, and providing (Food desert) shopping.. will still fall short from Supermarket competition.
      Low mark-ups on food items/toiletries and selection is a limiting factor for this direction.
      Has this company reached its market cap with its retail mindset.

      Without the finical disclosure of its several healthcare ventures i.e IV/Homecare/PBM components, Executive pay for performance cannot be evaluated.
      Also, the business model Value/direction and corrections will be difficult to judge for clarity in Walgreens Stock Value.

      How would you play this investment?

      • 2 Replies to robbsbeach
      • "Big Yank believes strongly this Executive management team of Walgreens is ineffective in dealing with the new dynamics in Retail competition."

        Yeah, I guess that's why WAG stock is skyrocketing.

        http://finance.yahoo.com/echarts?s=WAG+Interactive#chart1:symbol=wag;range=6m;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

        "He has made some very good points when he is not bashing."

        Name just one, and back it up.

        "I like many others look at the competitive landscape in this sector and have witnessed Rx erosion from Mail Order, Supermarket competition and limited provider networks."

        Walgreens fill 778 Million Prescription in 2010.

        Would that be called reverse-erosion?

        "Convenience as a business plan is justified when picking up a 6 pack or chewing Gum,"

        Another pearl. Convenience couldn't possibly be justified for picking up cough syrup, Q-tips, nail pollish, frozen pizza, or any of the other 20,000 items Walgreens carries. Your insanity knows no bounds.

        "however when a family is dealing with the High costs of medications and therapeutic treatments, decisions are made and financial resources are allocated to pay for these services."

        Brilliant!!!!!!!!!!!!!!!!!!!

        People also get dressed in the morning. I saw a tree yesterday. The keyboard on my computer has letters on it.

        "The days of the Insurance Company picking up the Bill are disappearing for the general population."

        The general population of WHAT COUNTRY? I think Walgreens RX business is now 97% insurance. 30 years ago it was 27% insurance.

        "The Growth in this Sector has come from Technology, Innovation and financial commitment to the Core of a companies business model."

        Finally, you said something accurate, incredibly obvious, but accurate. That describes Walgreens business model to a T.

        "An example is Express scripts or Medco."

        "An example" refers to one example. If you wanted to limit yourself to one example, why did you list 2 companies?

        Express scripts and Medco are both great at what they do. Walgreens is beyond great at what IT does.

        "Neither has a Retail brick and Mortar operation."

        Nor do either have a company submarine. So?

        "90 day maintenance Rx refills will likely impact retail traffic"

        Yeah, especially since the only reason to a retail outlet is to get "gum or a 6 pack".

        "and providing (Food desert) shopping.. will still fall short from Supermarket competition."

        Fall short of WHAT???????????????

        "Low mark-ups on food items/toiletries and selection is a limiting factor for this direction."

        Are you trying to say, "there profit margins on retail and food products" again?

        "Has this company reached its market cap with its retail mindset."

        Have you been in a coma?

        What's the most recent indicator of business trends?

        January Sales!

        This is something that Walmart and CVS refuse to disclose.


        Walgreens January Sales blew the analysts away!
        They were UP 11.3% to 5.93 Billion.

        "Without the finical disclosure of its several healthcare ventures i.e IV/Homecare/PBM components, Executive pay for performance cannot be evaluated."

        http://articles.chicagotribune.com/2010-12-23/business/ct-biz-1223-walgreens-earnings-20101223_1_walgreens-earnings-walgreens-shares-greg-wasson

        "Also, the business model Value/direction and corrections will be difficult to judge for clarity in Walgreens Stock Value."

        "judge for clarity"??????????????

        Investor seem to be pretty satisfied by this business model. I guess I should qualify that as INTELLIGENT investors.

    • That's all you've got.

      An odor from a bathroom that Britney Spears was quite happy to use?

      What about Record Sales?

      What about Record Profits?

      What about Record Dividends?

      What about Record Customer Counts?

      What about Record Market Share?

      What about Record Stock Price?

      I guess in this particular Walgreens that Britney Spears happily did her bathroom functions in, they didn't have a restroom attendant standing guard to make sure no one did anything in there that might cause an odor.

      Let me know if you need any "refresher" links to all the Sales and Profits Records Walgreens has turned in these last few weeks.

      Meanwhile, please continue sniffing bathrooms :-)

 
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