Funny you should ask. A friend of mine owns a store fixture liquidation company. When a retail chain closes stores or goes bankrupt, they are almost always the ones who buy the store fixtures.
They just finished up with AMES, for example.
This guy handled all the Builders Square/Hechinger closings previously, and is very up on what's going on inside K-Mart.
We spoke last week, and I asked him about K-Mart. I said I could not believe they emerged from Chapter 11 after losing $1/2-Billion in the 1st quarter. I said from where I stood, they appeared ripe for liquidation in Jan. 2004.
He said he was at their headquarters about 3-1/2 months ago for a meeting, and the talk then was that they were going to emerge from Chap 11 so the consultants could all get their bonuses (for a successful turnaround), then they were going to take it right back into Chapter 11 again and liquidate.
I mentioned to him that this whole deal smelled of a convertible preferred, as the guy who owns 50% of KMRT was a bond owner, and he was very anxious to get out of Chap 11. I would need to check the SEC filings, but if he's not shorting this stock into oblivion through some offshore account he's a dumb guy.
To make a long story short, KMRT is a dead retailer walking that's being milked dry while it's still alive. Will your world be any different without them? No. Will anyone miss them? No. Are they relevant? No. Therefore, they will die.
Stay away. I know retail. |
