Unfortunately, Kiwi and Newboater are both correct... The inventory is a joke... My local store actually had to write off and throw away �Christmas� items because they where crap... The store manger was embarrassed to even put them out for sale, never mind that she got them on Dec 21st??
The stores are being flooded with discontinued items that haven�t sold... they will have to discount them even further just to get rid of them... Shows as a loss for the store
This spring is setting up to be a disaster...
Late last summer they did a complete rearrange of my store� Customers along with associates still can�t find everything� Now they are setting up for spring by moving everything around again� Everyone is confused� Guess this is part of their new policy to make the associate lead the customer around so they call talk and become their buddy and try to get them to buy anything�
All the new management team wants to do is keep the stock price up, And it�s not only at the DM or regional VP level... It comes direct from Peter Harris... the 3 VP�that are left and the DM�s are just �yes� men� Experienced store mangers are leaving in discus or being terminated because they didn�t met �Showtime� expectations� Any one who has worked at West Marine for over 3 years is not happy... It is no longer a fun place to work... Forget customer service� All they want is for you to buy something... Anything�
The new company police about price matching is driving more customers away from the stores. .e.g. There is a current sale on GPS�s online... The same unit is $120 less expensive on line then in the store... the stores are not allowed to price match... The store is then stuck with outdated stock and has to take the loss� Oh well, sorry store manger you won�t get your bonus this quarter, Again�
When you have headstrong people running at the Regional and
District Manger level, they decide not to want to have boaters run their stores, but smiling faces instead. They would rather get rid of the older people and bring in kids that they can minipulate. Maybe a good idea that Mr. Harris gets out of the office and starts to survey the store staffs and managers without getting the threatning regional and district managers involved.
My feeling about West Marine is that they have lost sight of what made them a very successful company 10 years ago.
Then, the purchasing group was experienced, knew the products and the vendors, and worked in a cooperative, respectful fashion with vendors. Now, there is so much turnover among the buyers, that they have none of that knowledge or experience. Their relationships with the vendors are more confrontational and dictatorial than cooperative. Vendors continue to sell them because they are the largest channel in the marine aftermarket. But, the vendors don't like dealing with West Marine. That is a major change.
The store personnel all used to be boaters who were very knowledgeable about the products, what the products did, and how to install them. The same people were there to answer your questions. Now, the stores are staffed with retail clerks with little of that knowledge.
And, the store inventory is much worse today. There are many more out of stock positions and much more obsolete and slow moving product on their shelves. There seems to be a disconnect between the store management who know what is selling and the central operations staff who now controls the store inventory.
So, until these folks get back to the basics of what had made them a successful marine product retailer, all the slogans and clever programs will come and go and the company will continue to struggle.
Ok. Just to make you happy, I established a short position today. My reasons I have articulated. Does it mean the stock will go down futher? Hell no. Is it likely the stock will move up from today? Judging from the last 3 months, it is possible. Would such an upward move make sense? Not to me.
My prediction is that this company will take a minimum $8 million charge for inventory write downs and come in with a loss for the quarter of around $40 million and a net loss for the year. Guidance for 2007 will be vague, but Marine Max has already set the tone. I don't expect them to report 2006 results until just before the end of March to avoid discussing Q1.
Gas prices are going up even as oil prices are coming down. The housing market will continue to collapse and trillons of dollars in adjustable rate loans will be readjusting to a significant high side. The FED will not lower interest rates as inflation will be soaring as rents increase.
The only thing propping up this market in the short term will be a combination of Bernanke's continued expansion of the money supply and the infusion of money into retirement accounts which are largely put into stocks. A simple case of too much money chasing too few equities.
And, I might add that you should check out the resume of the new CFO. Not saying the guy is not capable of counting the beans, but it looks like "boating lifestyle" is going to be the buzz word going forward.
I remember when this stock was trading in the $3 range. I went long then because it was grossly undervalued. But its financials were much better then than they are now.
Whatever, my losses going forward will be your gain and vice versa. Investing in stocks is a gamble. But, if I lose, it will not be a result of relying on someone else's opinion. There are far too many people out there acting as investment advisors that don't have a clue. Most of my stock investments are with a special client group in a major brokerage firm. They make up for my mistakes. So this is just my gambling money. Sure beats going to Las Vegas where your losses are limited to you gains on a year by year basis.
At any rate, I like this company for its philosophy as it relates to boating. And, I will go long when it gets to the correct price because I don't think it will go out of business. But, it is time that management get serious about clearing out the accounting gimmicks like capitalizing inventory storage costs and similar nonsense. This is an inherited problem from the prior management team.
But, in the final analysis, this company has no excuse for a lousy 2006. The weather couldn't have been more accomodating. And weather has been the predominate excuse for the two preceeding years. So what will be the new excuse?
I'll finish by saying that in their lastest press release, they claim to have "approximately" 400 stores, yet they also were claiming they were shutting down unproductive stores. Are they contracting or expanding? Who knows anymore? Certainly, I don't. It may not be in my best interest at this point to suggest a move that could benefit this company, but I do believe a franchise model would work. It would put owners instead of managers at the helm. People with that would share the same philosophy as the founder of this company: give the customer what they want and do it with a personal touch that brings that customer back time over time because there is a personal connection with the store owner. If this company adopted that approach, I would dump my short position and go long in a heartbeat. I think it is a true path to success. But this assumes that we are not going to go into a financial meltdown. And, with that said, you should check out Bernanke's credentials. His claim to fame was his detailed analysis of the 1929 stock market crash and resulting depression.
How often do I post? I would if there was anything meaningfull to say about this stock, but there really hasn't been for quite some time.
Sorry, but I am not shorting this stock and would doubt that you are "up" more on this stock than I have made on it the past, but you could be. I have no reason to want you to lose your investment or any part of it, I just don't think this is a good value play for reasons that I and others have delineated in the past. But hey, if you think this a good value, invest more money.
Nothing, I am merely questioning a posters motives. I personally think someone who posts as much as either of you are not "on the sidelines", but people who are shorting the stock and spreading your biased info to try and move the stock. When you try and move the stock down then you post is something to me.
Regardless, I am up and you aren't so I think the proof is in the pudding and not your "numbers". LOL!!
What's it to you whether someone posts or not? If you don't want to read what they write, put them on ignore. If you think this is a well run company and your investment is going to continue to increase, then stick with it.
Having watched WMAR for a long time (10 years), the stock price does not match its recent results, nor does it appear to reflect its near term future. The accounting practices of the company are not conservative and they seem to overstate revenues/earnings. These are warning signs. And to me good reasons to stay on the sidelines. But who knows what will shake out in the future, I might want to get back in and its best to keep in touch with what's going on
Wow...for someone who doesn't care you sure have a lot to say. I really don't know a lot about all this mumbo jumbo about inventory and whatever. I just know my guy makes me money on stocks whose message boards are filled with naysayers like yourself. I pay him to know more then people like yourself.
I think he may know a little more then you based on the stock price. I also think you may be shorting this stock and are filling it up with messages to draw people out.
If you don't care, why don't you stop posting about a stock you don't own and go post on one in which you have a vested interest in.