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Strategies & Market Trends : Tang's school of business management for serious investors -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Tang who wrote (15)	6/23/2001 9:06:29 AM
From: Arthur Tang	Read Replies (1) \| Respond to of 57

Case history of the rise and fall of Ames Department Stores. After coming out of bankruptcy, Ames floundered for a while. Then they stop spending and went into a period of fast turnover of they merchandise. They reduced borrowings from over $300 million to half of that. They used more interest free trade credit, by fast turnover. Then one September, they overstocked their stores and enjoyed the best business they ever had. Traffic improved tremendously. That was in 1996. In 1998, they spend $44 million on new NCR computers when their yearly profit was only $20 million, and other losses piled up from internet experiments. The greed of buying Hills department stores saddled Ames with debt which still exists. The closing of stores and opening of store further weaken Ames' financial position. GE saved them with an effective $700 million new credit. AMES fell hard, because of financial planning or lack of it. To revive AMES, a business consultant will stop spending, and use all the financial resources to concentrate on fast turn over. In a year's time, AMES will excel again. GE could help them by doing what GM does to their dealers. Inspect AMES books every month. Is that matrix management? Will AMES learn matrix managemt through their own district managers?