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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: KyrosL who wrote (47319)	4/4/2012 3:05:46 PM
From: E_K_S	Read Replies (1) \| Respond to of 78748

Hi Kyros - More on SVU - The value proposition. I was thinking how SVU can leverage on their positive attributes, do something disruptive in the industry and start to utilize their assets in a much more profitable way. Is there an easy solution? Not really but an exciting opportunity IMO. What if SVU trimmed down their retail space by 30% removing shelf/storage items that (1) took up a lot of space and/or (2) were marginal product contributors and replaced that "retail space" w/ a customer pick-up distribution Kiosk. This would be an area for customers to pick up their pre-ordered items that were placed from (1) their smart phone and/or (2) from their computer at some other remote site. My thinking is that SVU could capitalize on the "smart phone" technology, online internet orders, their extensive warehouse & logistics back end systems and their brick & mortar store locations. The Concept for the Pre-Order Model SVU would build an electronic customer pre-order system allowing the purchase of high valued/high margin items w/i their stores, online, or even at other retail locations. SVU would partner w/ several established online retailers (like Diapers.com, coffee.com, bathsupplies.com etc) that would offer great deals to current SVU customers. SVU could cross promote products displaying a one off item at their store (ie. Armanino Foods specialty pastas) and allow customers to pre-order item(s) by simply taking a picture of the bar code w/ their smart phone. Vendors would deliver product to SVU's warehouse(s) and their distribution trucks would deliver items to the store Kiosks w/ 2 hour window pick up time (customer received special discount if received w/i that delivery window) using a "just-in-time" delivery system. SVU could lead the industry in online product pre-paid delivery (no receivables, product is paid electronically at time of order and therefore no inventory turnover). This type of pre-order sales model can be used for special meat & seafood orders for holidays, large one time "in season" produce buys, diapers from online partners like Diaper.com, specialty high value/high margin foods like coffee, pasta, bathroom and health care supplies etc. Now, you have converted low return retail store space, to high return high margin space where the key was integrating their logistic delivery system(s) into each store site for both refrigerated/frozen foods and dry supplies. Using the smartphone customers could scan products at competing retailers (like Costco) to see what might be available through SVU's online two-day store delivery service. Using Groupon, facebook, and other vendor offers along w/ SVU's retail channels, a new company can now get SVU's distribution channels and SVU is not responsible for maintaining inventory and/or shelf space. ------------------------------------------------------------------------- My point is that SVU has a lot of very good assets that can be reconfigured using new technology (like the smart phone) to present a compelling efficient pre-order distribution retail network. Too many times, analysts are judging a company based on "old" style ideas and if one just think's outside the box a bit, it can open up a lot of new and intriguing possibilities. Your point on debt pay down is a big one too. There has been a rumor floating that SVU may cut and/or eliminate their dividend which may have caused the recent selling in the stock. EKS