Rosenzweig hit it right on the nose. Wilson thinks the company has stabilized. Look at the stock performance., Richie! And you're going to spend more than a year's meager profit to move. And imagine, they want you to move, too!
One more thing. Don't you have a background in apparel? Yes, EPS grew. But it remains precariously thin. All I hear are promises. Check this stock's performance vs. S&P. Wilson, Winsten, et al, you are disgraces.
Bob....it is very interesting Richie's wonder boy in apparel who was going to save the company just resigned! The ship is sinking so fast! The buying staff is non-existent and the new ones being hired are so incompetent they don't have a clue. Richie has turned his buying staff almost three times in three years and it is not because of the corporate location! We all know who the problem is. On the call he mentioned inventories were higher due to increased buys due to the anticipated move....REALLLY???? The move had not even been announced yet...so how could they be buying 6 months out for a move that was not official yet. He failed to mention the REAL reason inventories were higher....Christmas merchandise sat in the back rooms for MONTHS because payroll was cut right before Christmas. A great deal of Christmas merchandise did not see the light of day until after Christmas!!! NO ONE brought that up did they??? You are 100% correct when you stated Wilson, Winsten ect are all a disgrace. It is devastating to watch one man destroy a company.
This probably won't make you feel any better about the move but...
The 2-2.5 million estimated cost of moving the HQ to Texas is only additional payroll related expenditures. They omitted a fairly large chunk of the moving costs.
From the call:
"This time, our estimate for the expenses associated with the relocation of employees and the separation expenses for those employees not relocating ranges between $2 million and $2.5 million before tax." - Wayne Peterson
Considering that they are only averaging 1.5 million in profit over the last two years, it probably going to cost *much* "more than a year's meager profit to move".
Thank you for bringing out the details. I painted with too broad a brushstroke. The factors that it doesn't make senses for a company in this financial position to be spending limited finances on this move. You're right- a train wreck with Wilson as the conductor and Winsten as the engineer.
Sorry Bob, Richie has no apparel experience, all hardlines and commodities. But don't let the facts get in the way of your axe to grind. It's ok, more than doubling the EPS YOY means nothing. Clearly you were wrong about this year's earnings. What the hell does "precariously thin" mean anyhow? As someone who wants quantifiable data, I would think that EPS more than doubling YOY would be a sign of consistent improving performance. And BTW, find someone who is an insider at Shopko. You'll then find out their Hometown format isn't going as planned. Guess that's what happens when you speculate on a private equity owned company.
lydia, no doubt the recent EPS is a nice bump. But, where did the money come from? More importantly, where will future money come from?
Wilson arrived in 2010. Company debt was $38 million. In 2012, it is $65 million.
In 2010 the company's free cash flow was $9 million. In 2012 it is a negative $6.7 million.
You can only operate to a profit for so long before you will need to produce to a profit.
Doesn't really matter if his background is hardlines, or softlines. Visit a dozen stores. The man is not a merchant........period!
Since you accuse me of not dealing in facts, let's try these:
1. From the press release when Richie came to Alco, it says he worked for two department stores and in general merchandise for a wholesale club. You want us to believe that he had a hardlines background? At department stores? I think he would be offended by the notion that he didn't have an apparel background. Not sure what General Merchandise means at a wholesaler like BJ's. but he spent a whole lot longer in the department store industry. I would love for him to say he agrees that he has no apparel background as you indicate.
2. Precariously thin means approximately three tents of one percent of sales. It means if anything goes wrong (or more wrong), the company is in the red. It means that net income as well as the share price are less than half of what they were when boy wonder got the job. Increasing horrible to bad is nothing to brag about.
His job is to increase shareholder value. Where is that, Lydia?
3. As for Shopko, my comment was a response to those who said they weren't opening smaller stores. I believe that the Hometown concept worked well until their energies were diverted by the Pamida acquisition.