Much talk about K-Mart. Here is my five cents worth:
As an analyst for the retail sector some time ago, it was my opinion that K-mart was destined for Ch 11. The idea of a "Super Store", and some tips from competitor WalMart suggested a turn-around story that saw the stock rise 300% in the past year.
What we analyst use to do, was meet around the country and discuss the viability of these stores going forward. While my employer at the time was the EDC, (Export Development Corp.), our exposure was on behalf of Canadian exporters. The majority of these analysts that would show up, were employed by the suppliers themselves. This is the key to KMs future. As soon as one major supplier stops the tap on future products, others WILL follow, that I know. At first it may be done in secret, as the first one to haul out will get more out then others downstream, but we were a tight bunch, and it would be hard to hide something like that.
My expectations are that these meetings are occurring as we speak, and certain suppliers have already cut the plug on KM.
S |
