To: RockyBalboa who wrote (62 ) 12/10/1999 6:55:00 PM From: A.L. Reagan Respond to
HAST is now at <50% of book value. They have made mistakes in executing an ambitious strategy: replace all internal POS and supply-chain systems, start up www.gohastings.com and then open and relocate a ton of stores. The principal error was that while they had the $$ from the IPO to do this, the horsepower in the trenches was lacking. The corporate and field supervision staff was stretched way too thin (which created a fair amount of turnover) and asked to do too much in too little time, IMO. I have had a landlord/tenant relationship with Hastings since 1994 and this is fundamentally a terrific company and a sound concept. They have grown from 8,100 sf to 15,000 sf and now just opened 31,500 sf in my Round Rock, (TX) center. I believe they have an excellent "clicks and mortar" strategy. This stock is way, way cheap now. The combination of the past mistakes in execution and the perception that a books, music, video retailer is the number #1 probable casualty from e-commerce will keep the stock low for a while yet. The real question is how long HAST will be dead money. I'm going to watch the new store in my center this holiday weekend plus try to get a clue as to what kind of volume "gohastings.com" is doing. They could actually pleasantly surprise in QE 1/2000 since expectations are so low. Marmaduke has proven in the past to be an agile operator, and taking a breather from the new store openings in virgin territories is a real positive step. He does have the troops to win the war once he focusses the assault on fewer fronts. Have no position in this stock, but it is a class outfit. Not much downside from here I daresay. Might try a few K shares just b/4 earnings if it looks like XMas is strong. Good luck to all HAST longs!
