This stock is essentially doomed.
Not only is there a severe cap on the size of this market in the US, but if you have seen some of their high dollar locations, most are ghost towns. Few if any customers.
Tea is NOT addictive like coffee is.
Nor does it have the frappes, and fancy latte versions.
Tea is a commodity that anyone can buy freely online or at grocery stores. There is NO cache to sitting in a Teavana store.
Its a fluke that this company even turns a profit. As it grows and its expenses grown, its margins will shrink to nothing. Its expansions will be met will silence.
In an economy that is flat, opening a niche market only enjoyed by 5% of Americans is almost absurd.
Goldman should have opened coverage at a SELL not Neutral.
Sell while you can. God save you all when the shorts can start tearing apart this stock.
I first saw my first Teavana during the Christmas season and bought some tea. Both times I was there the place was jammed. I liked the tea and will buy again. I have never been a tea drinker before.
Coffee will always be king. But I'm interested in this concept.
I know lots of people who drink tea, especially old folks who can't stomach coffee anymore.
that said, if the youth don't embrace it, its curtains for Teavana. If I see the slightest sign of this being cool for the high school/college student, I'm all over this stock. But in the interim, this could easily see single digits.
I totally agree. I'm a huge tea fan. HUGE. Just ask my wife. How many people have steeping hot water on tap just to take the time of boiling water out of the tea making process? No, I'm not Japanese. So when I saw a Teavana, I got really excited. Great, awesome tea at my local mall. But when I entered the store, I was horrified. You waft teas at passing customers like this all day long and its going to go stale within a week. My wife talked me into giving it a try. Sure enough, the super expensive tea I brought home was totally flat. It TASTED STALE. I tossed the rest. I've been waiting to short this stock but somehow missed the IPO!!! Grrrrr... how did that happen????
Today was a super busy time at the mall. While my daughter was busy looking at the fish in the fountain, I checked out Teavana. It's got THE most high traffic location at the mall but was TOTALLY EMPTY! Totally empty. How do they even cover their lease let alone stock dozens of exotic teas that have undoubtedly gone stale a month after store opening?
The only question with respect to this company is the hype. Some outfits can churn store opening growth into stock price. All that's happening is they are growing off the initial store opening curiosity revenue. That stuff goes away pretty quickly. So the question is whether they have gone through all of the new markets and shoppers yet. Pretty soon store count starts to drain resources.
The market is trading in a 10% range lately. I predict that with each dip, Teavana is going to lose more and more value.
Does anyone see any source of revenue other than mall stores? How's their internet traffic?
I disagree, at least to some extent. Firstly, beverages come and go and have a fad aspect to them, like Snapple, Gatorade and so forth. Secondly, there is no concerted marketing effort to this store, in fact I just found it. Thirdly, and most importantly, most everybody is IGNORANT when it comes to tea. Believe me, tea is the most fascinating beverage on the planet. What we have been drinking for tea is just like drinking flat Coca Cola. There is a reason why it is consumed everywhere. Tea is a sleeping giant. Not sure about the stock though.