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  • fabricone1 fabricone1 Oct 9, 2012 1:07 PM Flag

    Who really wins here ?

    I really think it will take quite sometime to find that buyer at $5. Private Equity money is not stupid money. They do not want something that is totally broken for any kind of premium. Having said that if the Clinton Group can make the initial steps with their new Directors 5 or even more could be achieved. What I do not like is that the burn rate most probably will accerate as there has not been a real good house cleaning on inventory and it is very over valued at the current lprice level.

    I have cleaned up previous management messes before and it comes with a price . Cleaning it up is not the issue. What the new Directors and the operating team decide to do with it is the key issue. While there is a good cash position currently it is far from cash rich so a lot has to be done with very strong competition surrounding everyone of their units. Stores are just a box and that is ok but the company really does not have a Brand Image that will be useful for the long term. Two losing concepts. Can it be done ? Yes but it will not be easy or very pretty because the Clinton Group will be afraid to damage values further at this point. They are investors not operators and a strategy that just trys to preserve the value will be difficult from the current status of the business. I did extensive research and analytical studies to present to Mr. Kahn and the number one problem can not be solved without spending some money to rebuild this business.

    So in summary if the CG is successful you can see the $5 in 18 months +/_ but you mmight see low 2 level as well. There are better plays imo.

    Sentiment: Hold

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