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Strategies & Market Trends : Value Investing

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To: geoffrey Wren who wrote (41306)	2/1/2011 9:16:53 PM
From: E_K_S	Read Replies (1) of 78666

Hi Geoffrey - What do you do when your company's stock is selling at a 23 year low, sales are declining and analysts rate your company at "underperform"? You promote the executive that continues to generate the majority of free flow cash for the company, runs a very efficient state-of-the-art supply chain business, and may have some "new" fresh ideas for integrating the "supply chain" & store vendors w/ in store merchandising to move more product. Supervalu names new merchandising exec businessweek.com From the article:"...Haugarth will be responsible for all merchandising activities across the company's traditional retail and independent retail businesses. This move consolidates the leadership of all of the company's merchandising activities, with the exception of Save-A-Lot, under the leadership of a single executive vice president. Haugarth, who the company has said has been with Supervalu for more than three decades, will continue to oversee all supply chain and logistics operations...." -------------------------------------------------------------------- Integrating the successful Supply Chain Business into the merchandise store retail side should bring the efficiencies of the Supply Chain closer to the customer. The key is to get the store vendors "linked" into the company wide store supply chain system(s) so point-of-sale logistic information (including vendor sales statistics) get transmitted back to the vendors. This will make sure product is on the shelf especially for units serviced through the vendor directly. I envision that the larger vendors will utilize Supervalue's supply chain warehouse and fulfillment services in place of their own out-of-date inefficient delivery trucks. This will take some costs out of the system that allow lower customer prices and higher margin to Supervalu. This will take at least 12 months to integrate through out their stores and will only impact a few of their top tier vendors. The promotion of their Supply Chain executive Janel Haugarth as its new executive vice president of merchandising and logistics is a real plus. Many of the analysts did not even mention this division or the promotion of Ms Haugarth when they issued their recent downgrade. EKS

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