Archive for category: Reading List

Last week was spent in Arizona on an annual excursion with old friends playing golf.  In my case, bad golf.  There may also have been a cocktail or two involved.  Anyway, as I left, GoPro came out with its 10K annual report and, while I was gone, Billabong reported its half yearly numbers.  So I’m behind.

But before I dig into those many pages of small print, my research department has sent me an article on Nordstrom that is worth a few words.

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Over the last months or maybe a year, I’ve watched the trade show discussion as dates have changed, unchanged, and we’ve all tried to figure out the role of trade shows.

We agree, I think, on the following:

1. We need some trade shows
2. Right now, there are too many
3. Face time is a primary benefit
4. It’s become harder to justify and time and expense of exhibiting or attending
5. It’s been a long time since the shows were critical to order writing

The people at Emerald Expositions, who “…operate more than 50 trade shows, including 30 of the top 250 trade shows in the country…” and who bring us Outdoor Retailer, Interbike, and Surf Expo, are trying to adapt.  So is Reed Exhibitions, the owner of Agenda, that has “…a growing portfolio of over 500 events in 30 countries…” and SIA, whose show many of us will be off to next week.

I’ve been thinking that all the discussion about when the trade shows should be held was kind of missing the point- changing behavior from our consumers, who are pretty much in charge now, means an internal industry focus on trade show dates that match our production cycle requirements isn’t, well, completely in touch with reality.

I was going to write a really great article on trade shows, the buy sell cycle, and changing consumer habits.  But then somebody I know sent somebody else I know a just excellent article and he sent it to me.  It’s called “The Big Shift” by David Clucas.

On the one hand I was kind of disappointed because I was gearing up to say cogent, insightful things.  On the other hand, now I don’t have to write it, and I can still bask in the glow of David’s smartness by pointing you to it.

Two of my takeaways from David’s article are the changes that are going to have to happen (and are happening) in production and inventory management and the advantages that big companies have.  Those advantages include having less need to exhibit at trade show, though that doesn’t mean trade shows in some form aren’t important to them for other reasons.

Meanwhile, here’s a shorter article on a large mall in in the Pittsburgh area that just sold for $100.00  No, I didn’t leave out any zero.  The buyer, Wells Fargo, already owns the dirt under it.  It opened in 2005 (not great timing) and is about half occupied.  Expect to see more of this.

Teen focused jewelry and fashion accessory retailer Claire’s Stores has more than 2,800 stores in Europe and the U.S.  It was the “beneficiary” of a leveraged buyout (LBO) back in the giddy days of 2007.  The debt it acquired in that process, along with the over retailed, soft economy, online selling environment has pushed it to the edge.

The article I link you to below talks a little about the LBO process and how Claire’s private equity (PE) owners are now using the threat of a bankruptcy filing to try and negotiate itself out from under its debt.  Below that discussion is a list of retail chain bankruptcies in the last 12 months, and a brief explanation of their PE connections where they exist.  You’ll recognize most of the names on the list.

Ultimately, the decline in brick and mortar location is a necessary and appropriate reaction to market conditions.  In the short term, it’s hard if only because of the discounted inventory that’s thrown on the market.  It’s also hard on the poor shareholders who bought shares in some of these companies.

Here’s a text message I got a couple of days ago:

“My name is ************.  I am from Kazakhstan.  In ***********, 20**, I have invested all my savings into ********** at the average price of $*.**.  I was an owner of 73,500 ******** common stocks when in ********, 20**they claimed CH11 without any reimbursement for shareholders and until the stocks were finally delisted in *******, 20**, so I have lost all my money.  So, my question is: is there any chance to get any reimbursement from them?”

I had to tell him “no” and explain a little about U.S. bankruptcy laws.  His result gives some of you something in common with somebody in Kazakhstan, which you probably didn’t expect.  It’s also a reminder of investment rule number one:  Never put all your eggs in one basket.

It’s worth reading this article to understand how LBOs work for some of the PE community and why things go to hell if the cash doesn’t keep flowing.  It’s all about the balance sheet.  The list of bankruptcies also reminds you of the breadth of our consolidation.

Here’s the link.