Exactly, the inventory $$ value is what was paid for it, now I understand closing down etc especially 500 stores at the end of the year and keeping them running through that Q is costly as it is a money losing concern and the first 100 stores closed in the summer did not have such a favorable time or conditions/time to sell in so their 1/6 of the inventory $15-20 mil for arguments sake will not have such good margins but still that money does help with closing costs, which are no small matter.
But the 500 stores closing in December (if we get confirmation that's how it went) with for arguments sake $75-80 mil in inventory that will be clearing out said inventory under the best circumstance, A) the Black Friday to After Xmas time period where you have a captive audience the stores are slammed, every go by a mall during these times especially Friday-Sunday and see a parking space, it is literally the only time one sees the huge parking lots of malls full.
Now it will be costly IMHO but with concessions and the ability to plan an exit and execute it so $75 mil in inventory that will not be left over excuse me if I do not agree with naysayers that the apocalypse is coming. Last Q lost 30+ mil and was left with 95 million in inventory, selling through the holiday season and ending up with no inventory that gets to be liquidated, where are these huge losses going to come from?
Retail people and those love to look at the most minute detail to find where there may be a 1.137% leak that they can point to from some COG SGO PDQ blah blah blah but was it staring them in the face black and white they ignore. Trips me out, people cannot see the forest for the trees. I get that those things matter but when your spouting thee potential huge losses, I ask from where? Why is that 80 mil in goods gonna be sold at Xmas time at no profit? Hell if it ended up half price thats 40 mil they lost less than 40 mil last Q and had the inventory left over? Now stores will be closed and all the inventory will be turned into cash, yes just like Francesca's they are blowing supposed doomsday scenarios,and like that it started with the bog impairment charges and write down losses that aren't cash losses and debts.
Its just a constant oh my god stores are closing, oh my god they are selling money losing businesses to take away debt that they incurred when buying them, oh my god they will only do 3.5 billion in revenues after, yeah but they forget to say the losses will be gone, and they will instead of losing a hundred million they will be making a hundred million going forward. $3.5 billion + business that's making money hand over fist will be left and that's a bad thing? Deserves to be under a buck let alone under $3-4 bizarre the nonsense they come up with during the retail shakeout once a decade. been waiting 20 years for dot com's to take out brick and mortar retail, check retail store numbers then and now they have gone up. Nearly 1.3 million in the US and they are screaming the city is burning because there may be 75K closings by 5-6 years from now, they neglect to say with new business chains etc there may be 75K to take their place in that time frame. As is what usually happens, been to this dance 2 times already 1999 and 2009 still waiting for that forest fire to burn out brick and tarot.
Yeah bring ER show me Dress barn leases good with exits and some concessions, show mu lane Bryant and please lord show me those 17 mil shares just shrunk the float which going forward will raise the earnings per share just by the very nature of the shares being shrunk by 17 million shares.
Then lace lace up. Hell show me just the Dress Barn thing is sorted, get out of that will no losses, and lose a 650 money losing chain from the balance sheet eating up 30-40 mil a Q from Ann Inc.'s etc's profits?
Its a footrace, trading at a quarter screaming the baby dying what shall we do? Hand wringers the lot of them.
Peace out.
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