Oh my, this is bad. Worse still, I think CEO Dean made the hire as she ascended to CEO. (see the news from last November).
This really is The Talbots , Part Deux; the incompetent CEO hires an equally incompetent head of merchandising, then fires them shortly thereafter as the bleeding continued. CEO took over merchandising, just as we see here, and fared no better. They were taken private 10 months later for an ever shrinking premium as sales faded and debt mounted.
Golden Gate is probably already talking to new CEO candidates to take the helm right after the Holidays, which will be dismal for CWTR, and not much better for shareholders. Each passing month drives the takeout price lower.
Most of the Californians I know are East coast transplants and have been waiting for years, in some cases decades, to frequent a Dunkin's.
Between improvements to the franchise infrastructure and supply chain, advertising, and pent up demand, I think this westward push will pay off handsomely, both for franchisees and shareholders.
It is our Manifest Destiny!!
Hey dog. The only reason I'm accumulating CWTR here and now is I see this playing out just like Talbots last year; troubled retailer with limited cash/resources, decent brand image, and questionable leadership.
As you may know, Golden Gate already has put $ into CWTR, has two board seats, and options to buy more stock at preset prices. They likely would not have done this deal (summer '12) if they ultimately didn't want the whole enchilada.
The thing is, by waiting, GG lets CWTR paint themselves into a tight corner with no leverage. What may have cost them $350 million last year, may only cost $200 million next year. Smart, eh?
Factoring in debt loads, CWTR could be taken private next year for $4 - $5/sh. I give that scenario a 70% chance which is why I'm loading up here - but only with $$$ I'm prepared to risk.
Thanks, bv. I was too lazy to go find the original pr.
The thing that is clear is these well-heeled franchise groups like Star and Sizzling are willing to commit to large multi-unit deals because they see the value in the brand and the ROI is very appealing.
"Co announced the signing of a multi-unit store development agreement with existing franchise group, Sizzling Donuts, for 18 traditional Dunkin' Donut restaurants and one Dunkin' Donuts/Baskin-Robbins combination location in communities throughout southern Texas. The first restaurant is planned to open in 2014 and the remainder by 2018."
Not sure if this is the same group led by Jerry Jones/Troy Aikman who signed up for something like 40-50 units last year.
Either way, it's clear DD is bedding down with proven franchisees to accelerate the expansion westward. Smart. And all these guys are gonna make a fortune over the next few decades.
At some point I believe the company should change the name of the stores. Nothing radical. But something that better reflects the growing breadth of their menu and their push into lunch and dinner..
Something as simple as dropping "Donuts" and going with just "Dunkin's" may just do the trick. Heck, we already call it by that name here in New England. Just make it official.
Remember a few years ago when Apple dropped "computer" from their name. Exactly.
Taken from BostInno
Does America really run on Dunkin’? According to a recently published map of every Starbucks and Dunkin’ Donuts in America, that slogan may be a bit of an exaggeration — but a new national media campaign hopes to get the west coast aboard New England’s favorite bandwagon.
Dunkin' Brands CFO Paul Carbone referred to Dunkin’ as “a beverage company” at a consumer conference earlier this week, confirming that the days of the nostalgic “Time to make the donuts” ad campaign featuring Fred the Baker will not be returning any time soon.
Instead, Dunkin’ will play up its best assets by centering advertisements around coffee and other drinks, which bring in 58 percent of revenue, as well as its second most profitable menu item, breakfast sandwiches. Perhaps the slow sales of doughnuts in comparison to breakfast sandwiches inspired the recent marriage between the two, also known as the Glazed Donut Breakfast Sandwich.
Carbone spoke of plans to move “west of the Mississippi,” utilizing the company's new spotlight on beverage sales to spread beyond the east coast.
Dunkin's main focus is on infiltrating the battleground state of California, which has the highest volume of Starbucks locations in the country. The company has been planting the seeds for its westward expansion since it began running coffee ads in the Golden State in 2010, despite the fact that Dunkin’ Donuts locations will not spread there until 2015.
Over the next few years, Dunkin’ aims to double its number of locations in the United States from the current count of 7,400, most of which are concentrated within the northeast, to 15,000 nationwide.
The hipster in me wants to protest against Dunkin' Donuts becoming too mainstream, but the Bostonian in me feels like a proud parent watching her child graduate from high school. Go get 'em, tiger.
"why would you invest in a company at its high?"
Good question, and I used to think the same way.
35 years in the market later one thing I've learned is that well run growth companies have a tendency to keep making new highs. Phasing into a position over a period of months is a popular approach to take.
For example, I built my DNKN holdings over a six month period and my avg. price if just over $31/sh.
Some of those buys were "at all time highs".when the stock looked toppy.
I'm holding this for several years. By then, $43 will look mighty cheap.
I don't disagree that CWTR's problems are their own doing; there are plenty of women's retailers doing just fine. At the same time, the economic downturn of the last few years killed off many marginal retailers, and to their credit CWTR has survived - thanks in large part to the investment by private equity (Golden Gate, I think?).
And that's exactly who'll be waiting in the wings to buy up the rest of the company for pennies on the dollar if Ms. Brown fails to execute the turnaround.
This is the Talbot's all over again. There was $$$ to be made there during the months leading to the eventual PE buyout, and they were in even worse financial shape and led by delusional idiots.
CWTR isn't going under, IMO. They will be bought. Well capitalized ownership, with better leadership and a more efficient infrastructure can rebuild the brand which still has significant value.
I put the price tag at $200 million, give or take. That's based on the Talbots deal last year.
Taken from today's Boston Globe:
By Alyssa Edes, Globe Correspondent
Have you ever dragged a piece of salty bacon through sweet maple syrup dripping from a stack of pancakes? That’s the taste sensation Dunkin’ Donuts executive Chef Stan Frankenthaler was aiming for when he came up with his newest creation: the doughnut sandwich.
The concoction, a combination of pepper-fried egg and cherrywood-smoked bacon, between two slices of glazed doughnut, debuted at the Canton-based chain’s stores across the country Friday.
Based on the early reaction from customers at the Dunkin’ Donuts on the corner of Commonwealth and Harvard avenues in Allston, Frankenthaler got it right.
“Wow,” said Cait Maynard, 18, after taking a big bite out of her first-ever doughnut sandwich. “It’s not as salty as I thought it’d be, but you know what it really tastes like? Pancake and eggs.” She chewed some more just to make sure.
“Yeah, just like a pancake — it’s so good!” said Maynard, who makes Dunkin’ Donuts part of her daily routine.
Another regular, Cody Nilsen, 20, had a similar reaction.
“I’m into it,” he said. “It’s like nothing else, one in a million, and the best of both worlds with the bacon and the egg, too.”
Even before Friday’s national rollout, a buzz was building over the “Glazed Donut Breakfast Sandwich,” which was test-marketed for three weeks in April at Eastern Massachusetts Dunkin’ Donuts locations. Online comments ranged from “hello heaven” to “America runs on diabetes” to “excuse me while I go have a heart attack.”
Frankenthaler said the social media response was massive and immediate.
“This was by far our biggest viral hit,” he said. “Within days of the test, people were sending pictures, tweeting ‘look what I got!’ or ‘this is so wrong!’ and it was just incredible. By overwhelming popular vote, it had to stay.”
The doughnut sandwich is actually rather mainstream. American food guru Paula Deen created a doughnut burger in 2008, and they have been a greasy staple a
Where are you?
The good news is, this is a permanent addition to the menu so you'll have time to wait for a franchise to open nearby.
I only have a couple of donut fixes a year (I prefer their tasty bagel sandwiches with my coffee), but I'll make a special trip soon to check out this new offering. Maybe tomorrow - National Donut Day! (who knew?)
Sure, why not?!
Any way you slice it, CWTR remains a mixed bag. This team gets two more Q's to prove they have the right stuff to fashion a healthy turnaround. That makes this coming Holiday season Ms. Brown's final exam.
Let's call these last two Q's "table setting" - identifying the right fashion trends, stocking the proper mix, belt-tightening, and closing underperforming stores.
You can only sing this song for so long. Ironically, the single biggest boost to CWTR prospects may be the economic climate, not Mother Nature herself. An improving economy may just just get them over the hump, even with an imperfect blend of fashions.
The bottom line is Wall St. wants to see top line growth in addition to margin expansion. If they can't do both, it's game over and the private equity vultures will take over. Just like Talbots.
CWTR set these expectations at the last conf. call:
First Quarter of Fiscal 2013 Financial Guidance
For first quarter 2013, the Company expects:
Comparable premium retail store sales to be down in the low single digits.
Gross margin improvement of 100 to 200 basis points.
Net loss per share in the range of $0.60-$0.80, excluding the impact of the change in the fair value of the derivative liability.
Total inventory at the end of the quarter to be down in the low single digits as compared to the first quarter of fiscal 2012.
Today (6/4/13) I see another poor excuse of an investing article on DNKN. This time written by Wall St. Cheat Sheet.
Regrettably, it's on par with the other pieces they've put out recently - meaning vague, incomplete, and inactionable.
The one thing NOBODY hits on, especially when comparing DNKN to it's peers, is that this is a FRANCHISE business model. To overlook this fact while discussing margins, debt, cash flow, etc. is a disservice to potential investors and reflects poorly on the author.
The author also fails to mention one word about Baskins, and the success this business (also franchised) is having overseas, particularly in Asia.
How does one discuss and evaluate DNKNs business while leaving out a major chunk of the enterprise?
The author ends with the typical wishy-washy notion that DNKN could be a BUY, or it could be a Wait and See. It might even be something to avoid. Gee thanks!
Coming Soon From Zynga: SCRAMBLE 2
The object of the game is to beat the other staffers out the door...