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Strategies & Market Trends : Analysis Class for Beginners

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To: Dick Brown who wrote (1185)	12/24/2000 4:34:41 AM
From: Arthur Tang	Read Replies (1) of 1471

AMES is not hawked, but advice were given to run it better. On Yahoo board, some numbers were reported by employees on daily takes on advertized sale. They were $30,000 and $173,000. This probably illustrates the large and small stores that AMES run. Small stores has to have $8.5 million revenue for the year. Larger stores could run $12-20 million per store; larger stores have more inventory to sell. Bad news is that the management has been slowing down on restocking to avoid after holiday mark downs. Inventory has been tightly managed. Based on the daily take numbers, advertizing is more important than store inventory cramming. So, we will never know the potential of a balance of advertizing and restocking, optimum condition for profitability at AMES. However, Bradlees were stocked well but they did not advertize much(they tried the word of mouth low price, low margin advertizing approach)and may have to be liquidated after the holidays. Currently, the investment on AMES is tabled until management reports X'mas revenue and earnings. The restocking and advertizement program in January, will determine whether AMES will be a good investment then.

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