Well, they certainly have not SUCCEEDED. And that is more important.
The same store sales increases are FAR FROM "dramatic." Your characterization is manipulative, self serving, and delusional. The average ticket is DOWN, even as traffic is up. That is a monumental failure for two reasons: One, it shows the lower initial markups are NOT getting people to buy significantly MORE merchandise. Two, it shows that buying broader and less deep is adding additonal sku And buying costs, that they are not really getting much back on. This is the LYNCHPIN of their entire strategy, and they have virtually NOTHING to show for it....because the overall gross margins, and gross margin dollars, are not coming through. Worse, some of the gross margin improvement has come from distribution efficiencies, which means that the actual merchandise buying is even impressive than it looks.
The clean and well organized stores are great. But that COSTS MORE to keep up, and again, if they aren't being rewarded enough on the sales front, that suggests, all the more, that they will NEVER be able to getmerchandising right. Because it's a BUSINESS MODEL PROBLEM.
Sentiment: Strong Sell
Your "mason tried to kill it but she failed" outrageous hyperbole. Besides, your logic is asinine. Specifically, if she was as bad as you say, why oh why hadn't rouleau had an easier
Time in turning it around??
You truly do speAk with forked tongue...and reveal your position to be unthought out at best...and totAlly fraudulent at worst. You can't say mason was horrible, without saying rouleau, after 18 months of barely moving the needle, is not nearly as horrible. You simply can't have it both ways and maintain credibility. Besides, it is not about "piling on mason" any more. It is about holding rouleau accountable for the last 18 month of what is effectively a failure....until or unless he starts to materially boost both sales and gross margins. But that is NOT the kind of guidance they gave in the last conference call.
Oh? You've NEVER bought a stock in your life that was losing money? Begone, you simpleton. ContrariAnism, and distressed investing, is one of a few ways to materially outperform market averages.
You are correct that that is WHY it is at $20. But that is mere perception, and NOT reality. It is the "cult of Rouleau," as some kind of combination of Johnny Appleseed, and a soothsayer, that explains why there are so many "true believers." And i know this is mixing metaphors, but the beanstalk is about to be cut down, when the xmas results come out.,...and maybe even the sept quarter results.
The gig will be up rather quickly, and Rouleau will have the curtain pulled away on him, with the truth of the last 18 months now obvious for all you ignoranmouses to see......and that is that there NEVER WAS any material "turnaround" at Tuesday Morning. Becker Drapkin knows that. And i daresay Michael Rouleau knows that...but is doing what he can to keep the IMPRESSION going on the Street.....until the music stops. No, i'm not talking bankruptcy.....but i am talking about a broad based conclusion that the business model is dead here...in terms of being able to earn an acceptable ROE.
Sentiment: Strong Sell
....with the possible exception of CLGRF.
I love ANR at these levels. I love the underlying value. And the relative balance sheet strength and liquidity.
Sentiment: Strong Buy
There's a very real question of whether there is really Ny significant "turnaround," at all, that is in progress. That is, in fact, why it is hugely overpriced at $20.
You appear to be a "true believer," like many others. Rouleau gets every possible benefit of the doubt....merely because his "shtik" is so enrapturing and electrifying......and because he "did it at Michael's."
I consider such analysis lazy and weak. The fact of the matter is you WANT to keep riding this horse, because you like the "good feelings" it has generated to date. And you will suffer LOWER long run overall returns from such a policy or being inappropriately "loyal" to a stock that has "run."
Sentiment: Strong Sell
I have better places to put my money, so i have sold out my entire position. However, if i didn't have such opportunities, i believe a strong case can be made for an appraisal action, and a claim that the "fair value" of Cobra shares is considerably higher than $4.30, based on management's future cash flow projections, the discount to book value, and other reasons. (To discount the future cash low projections by 44% seems rather arbitrary to me.)
I have gotten satisfying results, in the two cases i went to court with, and sought fair value appraisal. In one case, i settled for a premium of roughly 45% on my shares. In the other case, i settled at a premium that was over FIVE TIMES the original purchase price (before subtracting out my attorneys' fees).
Please do your own due diligence. I am NOT advising anyone to seek, or not seek, appraisal. However, if you do seek it, it would be best to find an attorney to take the case on a contingent basis.
Stringing us along for years, while maintaining a subjugated board, slavishly devoted to his every whim and desire. Then, when the company is in a DEFAULT position with its lender (hardly a position of negotiating strength with a potential acquiror), and trailing 12 month EBITDA is roughly HALF of what it was at the peak a few years ago, selling the company out for a 10% premium.
This guy has been a MONUMENTAL FAILURE as an executive. Trying and failing to buy Lowrance, with huge wasted costs. Getting into mass market GPS, with disasterous consequences, and massively overpaying for PPL, at the 2006 peak. Bazet is a boob, a con artist, a snake oil salesman, a manipulator, a rube, and, worst of all, grandiose and self deluded. A sedulously operated Cobra for his own interest, and constantly made up embarrassing and manipulative excuses on why he was failing, and why he was destroying value. The huge lawsuit settlement of late, and now, the serial "cost cutting campaigns." It just never ends, and never ended, with this guy, who was nothing more than a Louisiana country bumpkin, who somehow rose to the level of CEO of a storied consumer electronics niche player. He should been replaced at least a decade ago, but a TOTALLY USELESS and pusillanimous board was more interested in feathering his nest, and kowtowing to him.
This company is one of the worst examples of corporate governance I've seen in my years of activism. Bottom decile, at the very least. This whole outcome, and the timing of it, will bring nothing but shame and ill repute on Mr. Bazet. I have felt "scammed" by this con artist for years, and harbor tremendous resentment of him for his shameless manipulations, betrayals, chicanery, and patent self interest. SHAME!
Obviously, a totally non scientific analysis. Just sharing impressions. Stores impressively clean and orderly. BUT, only one other customer, at any one time, was there. And just me, a good part of the time. I only spent $25, when, i spend a couple hundred, several months back, the last time i was at a store. I didn't find any compelling "impulse buys," or particularly intriguing or "must have" items.
My thoughts are that the "specialness" of TUES just isn't what it used to be. Pricing is no better than many others. And selection just isn't the "treasure hunt" it used to be. In particular, the core categories of kitchen wares, bedding, linens, and luggage are just like anyone else's offerings.
I remain confident in the fundamental soundness of my short position, and believe that this thing is set up for a major disappointment. Why? Because Rouleau has FLUMMOXED the marketplace by "buying" an outrageous amount of time, by sedulously and brazenly convincing the market that it was like an 18 month "program" to turn the company around, and that the lack of ANY REAL PROGRESS, up to this point, doesn't matter, and thathe should be given the benefit of the doubt. The small token insider buys were intended to MANIPULATE market places into believing that Rouleau, and his CFO, are "true believers," and intended to distract from the much more significant SELLING by Becker Drapkin.
No matter. The proof will finally be here, with xmas quarter results. The excuses will be UNTENABLE, and Rouleau will finally have to live with the reputation he has earned.
There is a lot of "hot air" built into this stock, and the kind of results that are necessary to justify the current stock price are virtually unobtainable.
This thing is trading at pie in the sky prices....and i fully intend to short more, on any rally up into the $20's.
Sentiment: Strong Sell
....and have anyone want to "back" you any more.
The "highest value" for stakeholders (i.e. The lenders) is in a liquidation. PERIOD.
I expect vendors to be spooked by this report.
There IS NO BUSINESS MODEL HERE ANYMORE!
Sentiment: Strong Sell
It's asinine to talk about TUES stock following the market. The stock price is MAJORLY "invested" in the concept of a Rouleau "magical" turnaround. If that doesn't come, THIS XMAS, the stock will fall back to single digits. If the Street thinks we're looking at 80 cents in EPS this fiscal year, and $1.20 next, well, then MAYBE it goes up to $20-25.
To hold a stock like this as a "proxy" for the market is absurd. And negligent. And misguided.
I tend to agree with fabulous poodle. I would not dismiss Rouleau on the basis you do. Merchandising is not necessarily about all the things you are talking about. He's got a good team, that knows how to "stay with the times." The problem I have with the situation isn't that Rouleau is a "dinosaur," as you're arguing. It's that TUES has a permanently compromised business model...and he merchandising efforts, over the last 18 months, have LARGELY FAILED. And what I resent is the "bombast" and the chicanery around this notion of "we're laying all this groundwork, and just wait until September 1st." That is a load of BUNK....and things should have been ratably improving, over the ENTIRE tenure of Rouleau....but he has BARELY moved the needle. What's even scarier is that some of the gross margin improvement has come from distibution center efficiencies, and other things, NOT DIRECTLY RELATED to having the "right merchadise."
I believe the "model" is permanently compromised, and will never earn more than a single digit ROE. And it will only get worse, over time. The concept of a "bare bones" upper end closeout retailer is passe. The "sales event" aspect of the business is also GONE. This is like the KMart blue light special. Everyone knows they can get similar merchandise at just as good or better prices at a number of other retailers. That was not exactly the case 20 years ago.
It's not that Rouleau is a dinosaur....it's that TUES is! My problem with Rouleau is that he is a snake oil salesman. He KNOWS he's failing....but he's been engaging in sleight of hand, and putting on a happy face. Because he has to. Prediction: Rouleau will be fired in 3-6 months, when Xmas doesn't validated his vaunted and self congratulatory "multi-point tactical and strategic plan." He acts like he's totally in control of this thing.....but, at bottom, when it comes to RESULTS, he's just spinning his wheels. But his "fans" love the kool aid.
Sentiment: Strong Sell