Good article, goes into the positives and does not ignore the negatives but also shows why this is one of the "ones" in retail that contrary to obvious charlatans comments won't end and couldn't end in any scenario where even if broken up an sold off the remnants would net in the worst case scenario $500 million + on a bad day.
Two of them are American institutions Lane Bryant and one of the crown jewels of US retail Ann Taylor (Ann Inc) If this were the late 80's it would have already been raided bought and sold off in pieces netting the corporate raider the $500+ million dollars on the worst of days.
Right from the jump Maurice's turned into a profitable business that now turns profits with their 49% stake being worth more than the $210 million in cash they received for the first 51%.
"In terms of Maurices, Ascena sold a majority stake and controlling interest in the business to private equity. The deal officially closed on May 6, 2019, and as a result, Ascena received $210 million in cash and retained a 49.6% equity interest."
People either love to use or fear that $1 billion debt number which is laughable I doubt the debt will get totally paid down by the time the term loan is due unless they can sell Justice, which in the end is what I believe they end up doing.
Sell the other half of Maurice's which is/was the plan always once the buyer/partner got the thing turned around even if you sell the 49% of the turned around company for the same $200 million that's another large hunk off that $1 billion, and then there is Justice, some point they will just say #$%^&*() it and sell it at a good deal to someone as like Dress Barn they will realize not having it is better than having it and they will be left with 2 US retail institutions AT and LB. And if I remember correctly they paid $2 billion for Ann Inc. they could sell that for half if they were foolish and wipe all the debt out then screw it sell the rest of it off, that debt number is peanuts compared to what the parts are worth, and everyone knows it. They just love scaring people with those BS #'s
But in saying that at the rate they are going by the time the term loan is due August 2022 it will be down to a manageable amount that can be restructured, which happens every single day of the week year in and year out always has done and always will do.
They planned for the closing of Dress Barn and the closing of their over extended fleets in each of their brands just like everyone else did and has to do in retail every 10 years or so. For some reason for the last 30 years retail and other sectors that used to be based on value and paying dividends got itself confused with the growth sector and the high flying technology stocks that always, always end up getting crushed for the most part with only the strong surviving, started in the 1910's caused a great depression at the end of the 20's and every 10-15 years the newest greatest technology of the day is the be all end all that will change the world and they will be the kings forever.
That never happens starting back in the 1910's when there were hundreds of car companies and money getting pushed into everything and out came a handful of winners the rest going bust. Happened in the late 20's with the dozens of appliance companies from radios to refrigerator's again a handful survived the rest went bust.
When retail and other sectors decided they had to get into the "growth" game and keep building and opening stores like drunken sailors is beyond me or why. Every 10 years there is a melt down in the retail sector as over extended companies find themselves with 20% more stores than they need or anyone else needs and a large swath goes broke the rest get their collective shi_ together and close down 4 of the 10 stores they opened in a city/county that didn't need them and get themselves back to the basics.
And its always heralded as the end of retail as we know it because contrary to reality they think people, women in particular will just willy nilly buy clothes and be happy to do so without trying them on seeing them and feeling them in person. Now going to go into all that no need to. ASNA is one of the easiest investments there is in the sector today and thanks to the flu hoax it will end up making many myself included millions.
I started watching a show recently "Succession" some goofy show on HBO where all the young (they think smart) young bucks think they know it all and the "dinosaur's" who actually made these fortunes don't know anything because its all different now and we have the secret sauce, when in reality the young and foolish are nothing but naïve car salesman pushing some BS coming of age "new reality" and they end up being shown as the fools they are and we dinosaur's end up putting them in their place.
Everyone have a nice day especially the shorts who help me become even more wealthy during retail apocalypse's and flu hoaxes pushed by another group of naïve coup plotters thinking is they can just destroy what is here, they will show everyone it was for the greater good because "they" have all the answers if people would just STFU and let them show them the way to the promised land.
Fools, each generation is the same and the millennials now get ready in another 10-15 years you will be the dinosaur's who are stupid, and don't know there is a new religion in town.
Hope all made it through this political coup attempt by the young guns and the communist baby boomers taking their last shot at absolute power with this latest scam. Many probably learned valuable lessons, hopefully, never margin they will short and short and short just because they can and know that at some point you will capitulate either on your own or forced to do so by your broker and always have 30% of your portfolio for cash so when the dust settles you can buy 10-12 shares for every 1 you hold and end up coming out better than you could have ever dreamed.
And many new people learn to invest, its not a daily/weekly/monthly game to truly become wealthy and not just chase being rich you need to own shit for a while, play with part of your sack every Q so that you can build its size for free, its an investment not a casino.
And most of all learn to to read a filing, understand it and understand how to figure out reality and circumstances for yourself, you will be far better for it. 9 out of ten people that spout wisdom on the internet don't know any more than you do they are game players and know just enough to speak like they have half a clue.
You need to learn so that you know which are good investments because even when blood is in the streets and literal fortunes are made coming out of them, many companies don't in every sector as they need to be flushed out and crushed as they were just playing at the game of business but if you don't know which ones you are in the same spot you were before. But, if you learn which are the "ones" and which ones you can take advantage of shorts and the opportunities they help make. Every spike and crushing they put these stocks through if one plays it right you can build a position that once the stocks return to normal and companies shook out the cobwebs and got themselves in shape and healthy that before you could only dream of.
Will let the charlatans come with their words of wisdom now and give their nickels worth of knowledge to this dollar poker game and let me tell them yet again, thank you for the life you have let me have its been and will continue to be a blast.
Make money while those running in place chasing being rich give you the opportunities.
"its easy to get rich hard to stay rich, its harder to become wealthy but far easier to stay wealthy"
Time, smarts and PATIENCE while all around people are screaming fire ask them for a light, they have to be good for something.
Peace out.
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