Justice when I got on the same page with others that this was the right choice to keep being that Lane Bryant, Catherine's, Casique needed to much hands on focus and actually much time put into coming up with the right plan going forward I thought okay let me look into Justice deeper. Now Justice was never my favorite because I didn't like the fact there were to many stores being over-saturated in many areas, in the wrong areas of the country and needed a much stronger push to online operation/brand/presence. I don't feel this way with 15+ year old people. Before that most of the time its the parent's that make the choices, many buying clothes without even asking their children's opinion and the fact that kids clothes fit better for the most part than adults so returns, the wanting to try on 10 outfits before deciding on one is put to rest.
So looking back through the last 7 quarterly filings you could see a pattern of how it was turning, and managements discussions saying as much before the following Q's showed it actually happening. Then with the results and management and results showing the improvement I then was on board with the rest. The company actually has been very good at identifying the shift in 2016/2017 and starting in 2017 start to put things into place with their Change for Growth program as is so painfully obvious in one aspect in that they paid 2019 to Nov 2020 interest payments on their debt and their early closing talks for Dress Barn for landlords. Making the process and outcome much more beneficial for both.
This from a CC by Tanger Factory Outlet Centers (SKT) – August 1, 2019
“We anticipate that Dress Barn will close all their stores at the end of the year, outside of normal lease expirations. We currently have 22 Dressbarn stores, including the Roz & Ali concept in our consolidated portfolio with approximately 177,000 square feet and average sales of only $140 per square foot.”
“We have a settlement agreement with Dress Barn that the stores will remain open until December 31. They will be included in 2019 occupancy. I just want to mention that they have been cooperative and professional in the process. We have had probably 6, 7 months of advanced notice and are in the process of filling some of the vacant space with much more productive tenants going forward."
Regency Centers (REG) – August 2, 2019
“We’re happy to get our space back. We’ve been watching obviously both of them [Dressbarn and GNC] for a while, and we really, like I said, I think we’ve got an opportunity to upgrade our merchandising at the end of the day.”
There are others I just grabbed those quick as they were readily available, just because people do not know what is going on and things are being fed to media by those who want, need the stock to drop does not mean all is bad, it means they can't/aren't/won't talk about it.
Ascena will come out of this entirely in my opinion looking like the professional Fortune 500 company they are. Its misleading stories fed to the press and spread on social and the fear unknown that has helped hedge funds etc run the price down under $1-2 in the first place.
But the info is out there if one just spends the time looking for it in other companies (landlords) CC's/filings. One also must be a non the world is coming to and end placard holder as well and use some common sense.
Q1 2018
894 stores $259.1 mil
Q1 2019
845 stores $266.0 mil
Q2 2018
862 stores $329.6 mil
6 months...$588.7 mil
Q2 2019
833 stores $326.7 Q2 and beginning Q3 hit retail sector hardest
6 months...$592.7 mil
Q3 2018
855 stores $233.8 mil
9 months...$822.5 mil
Q3 2019
831 stores $227.4 mil
9 months...$820.1
10K 2018
847 stores $1.1 billion
10K 2019
??
So I admit I was on the wrong side of the argument with others, Justice after thinning out the herd getting rid of stores in over-saturated areas and under-performers by 63 stores are on track despite end of Q2 beginning of Q3 being bad for the retail sector are only down 2.4 million in revenue as of the end of Q3. They will I believe as do the others that the full year will end higher YoY due to CEO statement during the CC
"That said, our transformation program delivered significant expense reductions, and we were pleased to see improved comp sales performance exiting the third quarter. This momentum has continued into our fourth quarter with quarter-to-date comp sales up mid-single digits."
US retail sales numbers from the government show retail sales as it shows in Ascenas from April strong growth and continues strong.
Retail sales every month has done nothing but climb since it turned in April as anyone can tell the retail sector as a whole sales are up except for those hat just refuse to die, like the the boxes on the corner.
Also in the quarter for Justice, there were 12 states that had tax free holidays for the purchases for back to school purchase weekends prior to Q3 ending.
With retail sales surging each month, estimates for holiday season to be one trillion dollars up 4-5% good retail brands, will do good.
Now overall because of Dress barn closing stores and continuing its descent and the continued struggles with Catherine's in general lower margins and comps, yes. But those coming to an end in Dress Barns case 100+ stores this summer already, glad to lose bad revenues and the costs/losses that go along with them.
Have to focus on the cream and what will be left not what is leaving the
the show. novice trader and a few other said they never thought about investing in retail, I don't as a rule, I do play the earnings as retail is generally a walk through the hills during the year. You have your valleys in between earnings and your peaks and you can make a solid small % in between them buying the low selling the highs and you are in in case of something good like a sale or an acquisition.
But every 8-10 years I find 1-2 then I am in till we get to the valley's as that's where the big gains are. One thing that makes it so boring and maniacal, some would call methodical. The overwhelming majority of people that invest, discuss or play them are number cruncher's and they are kind of like a nagging wife.
Nothing is every good enough, there is always a but, you didn't do this in retails case oh but this number is off, and these numbers show a decline and that, what about that, and this bunch of shit and that bunch of shit. Gives me a headache and it does mean something but a very little something, just like the trash you want to take out in the morning after you got done painting the house and bitch won't let you rest, its never good enough.
Those people drive me crazy. I like the bottom after the wipe out and find the ones that shouldn't have been there in the first place, down yes, the sector was and there were problems but laying in the mud getting pissed on seriously? And then the important things happen, closing dead stores, doing the same rev with 50 less stores, selling losing brands etc.
But then they got, but comp down, and SGO on the flip side of COG and this "could" happen and this "could happen" all the while ignoring the obvious and when its trading for pennies on the dollar I could care less about the minutia as it doesn't matter at this price point.
What matters is getting out of Dress Barn good? Yes okay check there is a .50 SP, so BK is off the table now then right? Okay that sent them into a .50 drop so where is that increase? After dress Barn is gone and those huge losses are gone the streamlined is going to be coming out of a huge holiday 1 trillion dollar sale period up 4-5% give me my folding money take these quarters back.
Shorts traders will try and play with it, but, game is over. And announce a Lane Bryant Catherine's sale, this bitch is gone. Show the company used some money to buy back 10% of the OS for pennies, this bitch is gone. All that minutia number cruncher insignificant at this point BS means nothing at this stage of the game, when the price gets back up to where it should be that's when tdeck say see ya till the dip in the valley.
Because yes, long term in retail is boring and frustrating and really nothing to get excited about unless you are getting some divs and even then blah blah blah, but 8-10 years or so its party time I am getting paid time. On one or two that are deserving. Others may come back too, but they weren't crucified and their climb back will be boring.
This one was crucified and like Christ....well you know happened on the third day, in retail come backs its on the third Q that they usually are back to their old self March.
Peace out.
Gonna do the same thing with Ann Taylor and Loft as I did with Justice show the 2 year change in stores etc from their reformation of the brands, that Change for Growth thing they started in late 2017 and kicked into high gear Q1 2018 can see the lean brands and what we will be left with on a Lane Bryant/Catherine's sale. I think will be the same as Justice above only better, I am personally looking for 2020 to be 3.5 billion dollar revenue company making dollars with the diamonds after the paste is sold/closed with that 49" of Maurice's profits the cherry on top.
Peace out.
