2 quarters with store sales not improving and chain sales down 25%. You cannot make money is a store 10X larger than sales volume achieved. They are selling low margin items ,not Rolls Royces in the plant with big gross profit per sq. foot. There is no other retailer with such low gross profit per square foot of sales. none
They don't have cash to pay the suppliers on time or fund the pension and the interest savings is small after they jacked up the current lines of credit on the refi. Why offer to pay more for the bonds than they currently trade for unless you want to enrich the current bondholders. They don't have the cash after this to pay off 1.3 debt due next spring.This is about protecting those bondholders and screw everyone else in line IMO.
I bet all vendors will soon ask for letters of credit. SHLD just made getting paid less likely by paying off this debt early. This is really very weird. If they do this they run out of cash before Christmas 2015 with inventory build up for the holidays and the provision to pay the 1.3B in March. They are getting ready to file BK and are picking winners of creditors is my belief.
The only reason to hold here is the stock been "abused" by the offering and price will catch up with the competition or a buyout/ merger. I think you will be happy here come end of year. I think the balance sheet changes afforded by the secondary were necessary long term.
So Eddie can get his cash out before BK..The offer price is more than the trading price too. Think the vendors will like this move draining liquidity? I think they are working the BK right now
He want the books to be conservative so it he sells the company you will be happy with the reduced price he gets. Lowering your expectations. Also if he is setting to buy another Co with older planes (AYR) he will use the FLY impairment to use against them in negotiations of their price of older planes.
Obama got the stock market go up 140%.Eddie got SHLD to drop 87%.Who is better again with money? LOL
My guess is less than 10% of the stores are profitable since they are operating at about 10% capacity. Could be 2% profitable