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Sears Holdings Corp. (SHLD) Message Board

  • Tadou775 Tadou775 Nov 21, 2007 10:01 PM Flag

    I Visited New Store In Atlanta

    I visited the new store in Atlanta yesterday. In no particular order here are my observations:

    1) They shut down the old Kmart around October 10 and opened the new store last week - so the renovations did not take long.

    2) The outside of the building is nice but it's brown, which is similar to the Sears Essentials store like the one I saw in Kansas City. I think brown is a bad choice because it's dull. But other than color it's nice. Also on the outside of the store it says Kenmore, Craftsman, Lands End and Pharmacy.

    3) Lots of aisle space and Lands End is easily 1/3rd if not almost 1/2 the store. You wanna know why they are doing the RSTO deal possibly, I think he is building Lands End. I believe they are trying to turn this into a yuppy store and Lands End, RSTO, Name Brand hardware, etc.

    4) They didn't put a whole lot of capital into this. If they spent $1.5 million I'd be shocked. Same in some spots dirty ceiling. I asked the manager about lighting and he said it was new bulbs but not new lighting. Same floor had some marks in some spots. New shelves, internet kiosks everywhere. Lands End, Lands End, Lands End.

    5) The stores within stores thing is silly. It doesn't come off like that it comes off as different departments.

    6) It's in a G-R-E-A-T location. Upper middle class suberbs, within one mile of HD, Fresh Market, Whole Foods, Target, restaurants, just outside 285 in Atlanta. Prime time location and definitely valuable real estate.

    7) Manager is new. From California moved from an Office Depot there. So fresh blood. I was snapping pictures and several people stopped me to see what I was doing and he tried to take my disposable camera until I told him I was an investor and he was a really nice guy. We talked for 10 minutes or so.

    8) Decent traffic for a Tuesday at midday.

    9) I'm not saying that every location like this will work, but I think this store will TON it compared to what was there before, within minimum investment. It's really nice. Adding RSTO furniture and high end finishes could be a big deal. I know the EV of RSTO is not high, but it could have a meaningful effect on a store like this.

    I am very bullish on ESL long-term so acknowledge my biases. My conclusion is that in many regards this store is not as big a deal as they made it out to be. Yet coming from how bad these kmarts and shlds are maybe it is. But I can see what they are going and it's making sense. I've been to the past two shareholder meetings and I totally get the whole "we are a learning, testing company."

    Buffett wrote in early 1980s that Ben Graham always taught him that the best investments are those where small changes can have a big impact. With $50 billion in sales and a small bottom line, small changes here can make big difference. I've heard ESL say that's a major reason he was attracted to SHLD. I get it and I like it.

    Riding the stock down from 195 hasn't been fun, but he'll shrink the float and when the cycle turns and they've retooled this thing it should be fun.

    PS I have pictures that I can email of the store if you are interested respond to this post with your email address.

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