CLST - CellStar Corporation Message Board

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Technology Stocks : CLST - CellStar Corporation

CLST 14.68

-0.5%

Nov 14 2:07 PM EST

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To: Sheldon Hochberg who wrote (220)	1/15/1998 1:12:00 AM
From: Jeff Tribble	Read Replies (1) of 641

It simply means the company's decision to exit the retail business was correct. Gross margin % has now stabalized around 10% for the past 3 quarters after being in the mid-teens last year when they had all the Sam's Club outlets and retail locations that cost them approximately $20mil in SG&A per quarter. This was also a great decision because the activation income and residuals paid by cariers kept being lowered while the market pressured them to give away phones at the retail level to keep sales volumes up. Those market pressures are now removed from their business plan.

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