Shearhart Corporation (SHW) Home and Rural Message Board

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Gold/Mining/Energy : Shearhart Corporation (SHW) Home and Rural

SHW 340.23

+2.0%

Nov 7 9:30 AM EST

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To: Scott Mc who wrote (3)	7/3/1998 9:37:00 PM
From: Buckey	Read Replies (1) of 86

Scott: I am not ssure that i would consider their expansion RAPID. Not my perception - maybe yours. Good their are getting into servicing - another differentiation from Future Slop - More value for the consumer. On Warranties - A must in this business to offset the price competitive and low margin % nature of this business. A warranty has no inventory cost and is 50% GP - and cash flow positive - You get 100% and then pay the Insurance underwriter. However, depends on the way they are running it. Some companies underwrite the warranties themsleves and accrue those warranties as liabilities on the books ( they set aside 50% of the warranty revenue for claims) Bad news if they run it this way is that the consumer gets left holding the bag if the company goes under as secured creditors get that money. MAJESTIC Electronics went bankrupt and their warranties were not honored as they did it themselves - Future Slop is doing the same thing. Leons, Sears and most other use an insurance company. Everything I have heard from the suppliers to Shearhart have been positive. Good luck - Retail is tough but if run properyly these guys might do very well

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