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.
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.