Wal-Mart Message Board - Msg: 9140327

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Non-Tech : Wal-Mart

WMT 102.62

+0.9%

Nov 7 9:30 AM EST

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To: Ken Turetzky who wrote ()	4/26/1999 5:39:00 AM
From: William Harvey	Read Replies (1) of 1166

Last week, Wal-Mart stockholders got an announcement about one of their contractors. Here's the rest of the story about Jan Bell (JBM) The discount jeweler, JBM, is down 60% since the first week in February. They decided not to renew the contract with Sam's Clubs and Wal-Mart (67% of revenue). The contract had been breaking even for Jan Bell but the real winner was WMT: Wal-Mart has been netting $.75/share ($22M/year) off the deal. If WMT doesn't want to rock the boat and keep on earning the $22M/year from JBM's jewelry counters AND give Jan Bell the power to close those counters that are unprofitable, then there will indeed be talk of a buyout over the next 20-odd months left in the contract. Market cap at JBM is only $90M. What would be a good price? You tell me: WMT nets $22M/year and JBM almost breaks even. Oh, I forgot, WMT would get a 1910 established, 20 store luxury jewelry chain in Florida ($120M/yr), and be the supplier for 3 e-commerce distributors; ValueAmerica, ShopNow.com and iMall ($20M/yr) going at a 35% gross profit margin. Puzzling? Try these chess puzzles: geocities.com:80/~wtharvey/prodex.html

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