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Microcap & Penny Stocks : Ames Department Stores (AMES) -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Tang who wrote (1073)	3/25/1998 8:35:00 AM
From: Market Tracker	Read Replies (1) \| Respond to of 1911

Thank you Arthur, It appears from this article in today's WSJ, that Walmart seems to realize that AMES' smaller niche' marketing policy may be the way to go. _________ The Wall Street Journal Interactive Edition -- March 25, 1998 Facing Superstore Saturation, Wal-Mart Decides to Think Small By LOUISE LEE Staff Reporter of THE WALL STREET JOURNAL Get ready for Small-Marts. Now that most of the country is covered with its giant discount outlets, Wal-Mart Stores Inc. is preparing to test the appeal of much-smaller stores that could compete with convenience stores and traditional supermarkets. The company plans to open stores of 40,000 square feet by this fall in the Arkansas towns of Springdale and Sherwood and in Bentonville, where the giant discounter is based. The units would be less than half the size of Wal-Mart's current stores, which average roughly 92,000 square feet. Wal-Mart, Dollar General Lead Retailers Past February Forecasts (March 6) The move underscores Wal-Mart's struggle to find ways to keep growing as it approaches the saturation point for its existing store concepts. Domestically, Wal-Mart already operates more than 1,900 regular discount stores, as well as 440 mammoth, deep-discount Sam's warehouse clubs and 440 sprawling supercenters, which sell both general merchandise and groceries. Total sales last year were almost $118 billion. In building smaller stores, Wal-Mart is also acknowledging that giant stores require a commitment of time and energy that shoppers don't always have. "We lose a lot of customers because the supercenter is too busy and not convenient," says Wal-Mart Senior Vice President Jay Fitzsimmons. "Where we're losing sales is to the grocery stores" and other small stores. Limited Selection The smaller Wal-Mart stores are expected to sell a limited selection of groceries and general merchandise and operate drive-through pharmacies. The company isn't saying how many smaller stores it could eventually open. Wal-Mart hopes that the strategy shift will help it move into new areas, from very small towns to metropolitan areas, that are too small for a supercenter or couldn't support another large store. "We want to address those markets where we couldn't get a supercenter in," Mr. Fitzsimmons says. Wal-Mart has toyed with the idea of building smaller "neighborhood stores" for several years, trying to design an outlet that would fit somewhere between a supercenter, which lacks convenience, and an old-fashioned convenience store, which doesn't stock enough to allow low prices. Wal-Mart's main strategy in recent years has been to build supercenters and add grocery departments to existing discount stores. A Wal-Mart spokesman declined to comment on how prices at the small stores would compare with supercenter prices. But he said: "Regardless of our retail concept, our goal is to provide our customers with the best possible value." Wal-Mart, whose stores have gotten larger on average every year for the past decade, has always touted size as a major attraction. Besides selling general merchandise, Wal-Mart's supercenters, for instance, have full-line grocery departments complete with meat and produce sections. Supercenters, some of which are more than 200,000 square feet, also offer such amenities as hairstyling salons and banks. The Sam's units are cavernous stores that sell such items as furniture, appliances and bulk packages of food and household items. The new strategy doesn't mean Wal-Mart is abandoning big stores. The company this year plans to open 50 traditional discount stores, 10 warehouse clubs and more than 100 supercenters, most of which will be expanded or relocated discount stores. Given Wal-Mart's size, any new smaller stores aren't likely to have a major impact on the company's total sales. But sales at stores open at least a year have been growing about 6% a year, down from 11% in 1993, and the company could use a new boost. Foreign Struggles In addition, the company's domestic growth prospects are severely limited. "When you're at more than $100 billion in sales, how do you get bigger?" asks Jeffrey M. Hill of Meridian Consulting Group in Westport, Conn. "You have to go after niches that at first didn't make sense." Since 1992, Wal-Mart has also been trying to grow overseas, first entering Mexico through a partnership with Cifra SA. and then acquiring stores in Canada, where it now operates 150 locations. But growth outside North America has been more difficult. Stores in Argentina and Brazil have taken longer than expected to turn a profit. A venture in Hong Kong failed two years ago, and Wal-Mart recently pulled out of an arrangement in Indonesia with a unit of Lippo Group. Fresh store concepts have been slow in coming. Wal-Mart started the Sam's warehouse-club chain in 1983 and began building supercenters in 1988. But it hasn't tried any new approaches since 1990, when it opened Bud's Discount City stores, most of which shut down last year amid poor returns.

To: Arthur Tang who wrote (1073)	3/25/1998 9:05:00 PM
From: Market Tracker	Read Replies (1) \| Respond to of 1911

With February '98 sales up 10% over last Feb., the quarter is off to a good start. 1st Q earnings estimates all seem to be between ($0.27) and ($0.26), but I've got a feeling we can do better than the consensus estimates by the time the end of the 1st quarter rolls around. Last week I sold an underperforming mutual fund and added to my core holdings of AMES. I too have traded AMES in the past very profitably, but the buy and hold methodology would have reaped me even greater profits, so that is the way I intend to play AMES now. It's too good a company not to be in for the long haul. Gary