Seeking Alpha: Gordmans Stores Needs To Fix Its Merchandising, And Soon

Relative to my feelings about Gordmans Stores (GMAN) nine months ago, a lot of my biggest worries have materialized and come home to roost, burying the stock under a mound of guano. Sluggish traffic is an issue across the retail space (amply demonstrated by many mall-based teen retailers), but Gordmans seems to have particular issues with its merchandising and it is taking a toll on same-store sales. What's more, I really disagree with the company's decision to pay out a sizable debt-funded special dividend earlier this year.

I feel as though I am in an uncertain and uncomfortable place with Gordmans now. I believe management is moving aggressively to deal with its merchandising issues, and I do take encouragement from the apparent willingness of developers to continue extending financing to the company. I also continue to believe that Gordmans has a differentiated discount retail model that can support a much bigger store footprint. The setbacks in same-store sales and a balance sheet-induced change to my discount rate lead me to meaningfully lower my estimated fair value here, but it still looks as though Gordmans is undervalued relative to what I see as its long-term prospects.

Please follow this link for the full article at Seeking Alpha:
Gordmans Stores Needs To Fix Its Merchandising, And Soon

Investopedia: Lowe's Had Better Start Improving

It seems like a fuzzy memory now, but Lowe's (NYSE:LOW) was once seen as the superior operator to Home Depot (NYSE:HD) on the big-box home improvement battleground. Times have definitely changed, though, as Home Depot has gained an edge not only with its store locations (more stores in or near urban centers), but also with its merchandising. Making matters worse, Home Depot has significantly closed the gap (if not leapfrogged) Lowe's in an area where Lowe's once dominated – back-office logistics and cost management.

Even if Home Depot has been operationally de-pantsing Lowe's recently, it doesn't show up in the stocks over the last year – they both have nearly equal 60%-plus gains to their credit. Look at the two-year, five-year, or 10-year comparisons, though, and you see a wide gap between the performance of Home Depot and Lowe's (in favor of Home Depot). While there is a lot that Lowe's could do to close the gap and be a relative out-performer, the real question has to be “will they?”

Please continue here:
http://www.investopedia.com/stock-analysis/052213/lowes-had-better-start-improving-low-hd-shld-swk-mas.aspx

Investopedia: Best Buy Gets Its Bid

Back in June, I wrote an article that suggested Best Buy (NYSE:BBY) could see itself the target of a go-private bid from founder Richard Schulze, particularly after he stepped away from the company. Rumor and speculation became fact on Monday, though, as Richard Schulze formally launched a bid that values the company's outstanding shares at $24 to $26.

Read more here:
http://stocks.investopedia.com/stock-analysis/2012/Best-Buy-Gets-It-Bid-BBY-AMZN-HGG-JCP0807.aspx

Investopedia: Could Best Buy's Founder Take The Company Off The Market?

Electronics retailing giant Best Buy (NYSE:BBY) badly needs stability, and that seems to be exactly what the company is not getting. The company is still looking for a new full-time CEO, preferably one with experience in turning around a retailer, and now the company's founder is stepping away from the company. Now board chair and founder Richard Schulze has elected to step away from the company entirely, instead of staying on the board for another year as had been planned.

Read the full article here:
http://stocks.investopedia.com/stock-analysis/2012/Could-Best-Buys-Founder-Take-The-Company-Off-The-Market-BBY-AMZN-SHLD-DG0608.aspx

Investopedia: Now It's Lowe's Turn To Play Catch Up

It turns out that there wasn't room for two big-box retailers in book retailing or electronics, but that may not be the case in hardware and home improvement retailing. Neither Home Depot (NYSE:HD) nor Lowe's (NYSE:LOW) are showing the same sort of troubles as Barnes & Noble (NYSE:BKS) or Best Buy (NYSE:BBY), perhaps because so many of the goods they sell make little sense as online orders.

While there may be room for two, it seems like Home Depot and Lowe's are fated to play a lifelong game of leapfrog. Home Depot has solved many of the problems that drove away customers and is now trying to drive better savings through logistics. On the flip side, Lowe's looks like it's in the middle of a problem-solving store reset program, and its performance is lagging.

Please read more here:
http://stocks.investopedia.com/stock-analysis/2012/Now-Its-Lowes-Turn-To-Play-Catch-Up-LOW-HD-SHLD-WMT0524.aspx

Investopedia: The Window For Sears Holdings Seems To Be Closing Fast

There's no such thing as an essential retailer. Ask anybody younger than 35 about Montgomery Ward or Service Merchandise and you're likely to get a blank look; the same will be true of names like Mervyn's and Circuit City before too much longer. Although Eddie Lampert's team is working hard to fix what ails Sears Holdings (Nasdaq:SHLD), it is increasingly looking like an uphill battle for a company that is being out-done on multiple retailing fronts.

Continue here:
http://stocks.investopedia.com/stock-analysis/2012/The-Window-For-Sears-Holdings-Seems-To-Be-Closing-Fast--SHLD-AMZN-WMT-HD-JCP0523.aspx

Investopedia: Whirlpool Not Just Another Doomed U.S. Manufacturer

I've been curious about U.S. home appliance manufacturer Whirlpool (NYSE:WHR) for some time now; unfortunately standing on the sidelines while the stock soared immediately after the fourth quarter earnings. Although this company does have legitimately worrisome issues with margins, free cash flow conversion and foreign competition, skeptics may find that there's quite a bit more here than they assume.

Fourth Quarter Results Lukewarm  
Whirlpool had something of a good news/bad news release for the fourth quarter. Reported revenue fell 3% (or 2% in constant currency terms) and that wasn't great. Although North America eeked out a 1% sales gain, results were weaker than expected in Latin America and Europe (down 1 and 7%, respectively, in constant currency). Curiously, shipments were remarkably consistent across Whirlpool's major segments - down 3% in North America and 4% in both Europe and Latin America.

Read more here:
http://stocks.investopedia.com/stock-analysis/2012/Whirlpool-Not-Just-Another-Doomed-U.S.-Manufacturer-WHR-GE-SHLD-LOW0206.aspx

Investopedia: Maidenform Pulled Out Of Shape

Players in the intimate apparel space, like Hanesbrands (NYSE: HBI) and Warnaco (NYSE: WRC), warned earlier this month that the market was not so strong, and data from retailers like J.C. Penney (NYSE: JCP) and Kohl's (NYSE: KSS) was likewise not encouraging. Even with that backdrop, though, Maidenform Brands (NYSE: MFB) surprised the Street with a very disappointing third quarter and some self-inflicted wounds only made matters worse.

A Poor Q3  
There's no value in sugar-coating what was a lousy report from Maidenform. Sales rose less than 2%, while sell side analysts had been expecting 11% growth, versus last year's quarter. Wholesale sales, the bulk of MFB's revenue base, rose just barely more than 1%, but the results were curiously mixed. Sales to mass merchants like Wal-mart (NYSE: WMT) and Target (NYSE: TGT) jumped 15%, but sales to department stores were down almost 1%. (To know more about buy side and sell side analysts, read: Buy Side Vs. Sell Side Analysts.)


Please follow the link for more:
http://stocks.investopedia.com/stock-analysis/2011/Maidenform-Pulled-Out-Of-Shape-MFB-HBI-WRC-JCP-KSS-WMT-BRK-A-TGT-SHLD1114.aspx

Investopedia: BJ's Goes Bye-Bye

To see the announcement that BJ's Wholesale Club (NYSE:BJ) had agreed to sell itself was only slightly more surprising than Thursday following Wednesday. For starters, this warehouse retailer has been a laggard behind Wal-Mart's (NYSE:WMT) Sam's Club and Costco (Nasdaq:COST) for quite some time and laggards in attractive industries are always appealing takeout candidates. What's more, rumors, speculations, aborted offers and announced intentions have been preparing shareholders for a deal for at least a few years now.

The Deal That BJ's Got
BJ's announced that it will sell itself to private equity parties Leonard Green & Partners and CVC Capital Partners in an all-cash deal worth $2.8 billion. That means $51.25 per share - only about a 7% premium to Tuesday's close, but a 38% premium to the price before LGP took a significant ownership stake and very close to the all-time high for these shares.

Even at this price, though, BJ's is not exactly bowing out with a premium valuation. At only a little more than six times trailing EBITDA, BJ's is going at a valuation close to slow-growing Wal-Mart and Target (NYSE:TGT) and well below rival Costco and a wider universe of value-oriented retailers like Family Dollar (NYSE:FDO) and Dollar General (NYSE:DG). What is interesting, too, is that on a discounted cash flow basis this price does not anticipate much in the way of dramatic improvement - if LGP and CVC can really turn this business around, they will get the vast majority of the benefit.

To read the full piece, click the link:
http://stocks.investopedia.com/stock-analysis/2011/BJs-Goes-Bye-Bye-BJ-COST-WMT-TGT-FDO-DG-SHLD0629.aspx

Investopedia: Can An Apple Cure What Ails J.C. Penney?

Most workers go their entire career with only a vague sense of how much a company values their work. Ron Johnson isn't most workers, though, as investors boosted the value of J.C. Penney (NYSE:JCP) shares by more than $1 billion on word that he had agreed to leave Apple (Nasdaq:AAPL) and join this established mall-based retailer as its soon-to-be CEO. 


J.C. Penney Recruits a Proven Winner
While at Apple, Ron Johnson held the title of Senior Vice President of Retail, but what he really did was oversee the opening of more than 300 Apple stores that now produce upwards of $10 billion in sales. Almost every analyst now views the Apple store concept as a key part of its sales strategy, a major brand reinforcement, and a savvy move by a company always thinking a few steps ahead. (For more, see CEO Savvy And Stock's Success Go Hand In Hand.)

Of course, it wasn't always like this - at the time of the launch, it was seen as ridiculous, a sign of Steve Jobs' hubris and a mistake that would quickly be pounced upon by the likes of Best Buy (NYSE:BBY), Circuit City and Dell (Nasdaq:DELL). While it is easy to dismiss the success of Apple's retail outlets as just being dragged in the wake of super-popular iPods, iPhones, and iPods, that misses the mark. Plenty of companies failed in their attempts to build stores around hot products and Apple has leveraged its store base into a force multiplier for its brand and its business. (For related reading, check out Best Buy Has A Number Of Profit Levers To Pull)



Please follow the link for the full article:
http://stocks.investopedia.com/stock-analysis/2011/Can-An-Apple-Cure-What-Ails-J.C.-Penney-AAPL-JCP-BBY-DELL-TGT-KSS-SHLD0615.aspx

Kohl's Keeps It Simple

The retailing industry constantly recycles itself, as once-popular stores lose touch with their shoppers and fade away and newer entrants more in tune with customers rise to the fore. Kohl's (NYSE:KSS) is hardly a newcomer, but the company is showing that it has the mettle to last in the cutthroat world of broad-line apparel retailing.   

A So-So Quarter
Kohl's may be winning the war, but the company does not win every battle. For the third quarter, the company delivered total sales growth of a bit more than 4% on the back of 1.8% comp-store sales growth. That 1.8% is below the company's 2 to 4% target, but perhaps not so much so to be a long-term worry. Interestingly, it appears that traffic stayed pretty strong, but the average ticket declined - a positive outcome in the sense that it means shoppers keep showing up at Kohl's, even if they are spending less.

Profitability was a bit more of a concern. Gross margin did rise 50 basis points, but the company lost all of that and more on the SG&A line, leading to a 50-basis point decline in operating margin. Kohl's also reported a 5.9% increase in inventory; a figure that bears monitoring for the next quarter or two. 


Please click the link for the full article:
http://stocks.investopedia.com/stock-analysis/2010/Kohls-Keeps-It-Simple-KSS-TGT-M-GPS-JCP-SHLD1116.aspx