Gotta believe SHOS is a good short. Clearly Sears won't give them much inventory when open to buy is limited and the reduced credit terms means that SHOS is actually a 'cash user' now.
so their quarter ends this weekend. be very interesting when they announce the quarterly results in a few weeks. I'm not really looking for anything much different than the last few quarters. likely to announce Store/Market closing, Marketing spend reductions, and Payroll cost out to temper the poor results.
think the envision 250 to 300 stores that are primarily hardgoods. Looking for Whole Foods or Kroger to take the softgoods space. Just not sure the boat can float with that volume level.
gotta close stores/marekts. cut marketing costs by 50%. cut payroll by 20%. otherwise you are correct. and the magnitude of these changes might be fatal - but that's what happens when you expand a model that doesn't work.
their is a name for that type of behavior.
1) reduce marketing to 6% gross and 1% net.
2) 20% reduction in Store payrolls and a change in the compensation system to enhance customer service (cannot pay commission based on margin rate).
True - and they have deferred making the appropriate changes to their model for so long, that the necessary transformation changes alone may kill the golden goose.
agree on most fronts. the only issue is the smell. I have been told that is the 'smell of death'.
just no surprise - monetizing the retail assets was always the play. really never understood why anybody would have thought this was really a retail turnaround.
You see transformational change (primarily Store/Market closings and big reductions in Marketing Expense and Payroll) and then have a quarter where these transformational changes result in a profit.
you did not do a very good job of shopping. Sears has the highest cost of doing business and the highest prices.