First...Any time a retailer stops reporting monthly 'same store sales' with everyone else, because it
might confuse investors or some such reason...run!! Remember Nardelli tried that at HD. So did Macy's for awhile.
Second...I think any of the mall-based retailers - almost any of the specialty shops - are in for a really tough ride. I just can't see that business model any more. Same with the mall owners, as we've already started to see. Maybe there are exceptions - have to to think on that. Hold-out Abercrombie finally caved and started promotional pricing.
Third...Look out for Christmas dependency. One reason I like Walmart and Costco as much as I do is that they are not particularly Christmas-dependent versus others. Any retailer that typically depends on Christmas to make their year...well... That includes any of the remaining regional department stores, many of the mall specialty shops, and a host of others.
Fourth... Be wary of companies that have booked large impairment charges this past year - for example, Macy's, Office Depot, Zales. None had admirable balance sheets to begin with. I've never really liked Macy's accounting. Take that $5.4B write-down they took - for May (Marshall Field etc) goodwill and the like. Of course they bill this as a 'non-cash' charge, meaning they blew the money in prior periods, not the current one.
They did something like this before (when they operated as Federated) when things got tough, and included everything they could come up with as 'impaired', covering up a lot of other sins. We may see subsequent accounting earnings in the future, but perhaps not sustainable-business-model earnings. Meanwhile, equity disappears with the stroke of a pen.
might confuse investors or some such reason...run!! Remember Nardelli tried that at HD. So did Macy's for awhile.
Second...I think any of the mall-based retailers - almost any of the specialty shops - are in for a really tough ride. I just can't see that business model any more. Same with the mall owners, as we've already started to see. Maybe there are exceptions - have to to think on that. Hold-out Abercrombie finally caved and started promotional pricing.
Third...Look out for Christmas dependency. One reason I like Walmart and Costco as much as I do is that they are not particularly Christmas-dependent versus others. Any retailer that typically depends on Christmas to make their year...well... That includes any of the remaining regional department stores, many of the mall specialty shops, and a host of others.
Fourth... Be wary of companies that have booked large impairment charges this past year - for example, Macy's, Office Depot, Zales. None had admirable balance sheets to begin with. I've never really liked Macy's accounting. Take that $5.4B write-down they took - for May (Marshall Field etc) goodwill and the like. Of course they bill this as a 'non-cash' charge, meaning they blew the money in prior periods, not the current one.
They did something like this before (when they operated as Federated) when things got tough, and included everything they could come up with as 'impaired', covering up a lot of other sins. We may see subsequent accounting earnings in the future, but perhaps not sustainable-business-model earnings. Meanwhile, equity disappears with the stroke of a pen.
