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Gold/Mining/Energy : EATON'S IPO (JUNE 2ND) -- Ignore unavailable to you. Want to Upgrade?

To: William Whitehead Jr. who wrote (4)	7/18/1998 3:55:00 PM
From: Mary Monet	Read Replies (1) \| Respond to of 68

Lets keep in mind what happened at Eatons. Eatons hired George Kosich to get them out of the slumps. Anyone who knows George, knows he is a magician with numbers and an excellent tool to spread the good news around. If Eatons plans to survive and thrive, they must begin planning, quickly, for life after George. George's legacy was with the Hudsons Bay - the numbers looked good upon his exit (because that's how his ego likes it), but don't forget the mess he left behind. Look what happened to HBC stocks shortly after his departure, after the rubble was discovered, buried under his magic. HBC is making a remarkable recovery, but only after they scrambled to bring in fresh talent and new ideas. Bill Feilds (HBC) has had an enormous task of rebuilding the ruins that George left behind - and he's done it with both finesse and business acumen. Investors only saw the true face of HBC when Bill came aboard and ripped open the box of goodies...outdated systems, poor inventory management, high inventories, massive write-downs, to mention a few. What would have happened had George stayed? George's greatest talent is wrapping garbage in pretty wrapping. Unfortunately, after a while, it begins to smell. Bill is promptly getting rid of the garbage. That type of candidness is more valuable to the share holder than a masked surprise. George was the perfect candidate for Eatons, because Eatons needed a rose garden to plant on top of the land fill. In George's own words, "There is only room for 2 department stores in Canada, The Hudsons Bay and Sears...The [Canadian] economy cannot support more than that..." Eatons will not survive by emulating either of these departments stores. Right now, it is more important to watch their strategy regarding how they will differentiate themselves from The Bay and Sears, rather than emulate them. Filling their Executive crevices with "old school thinkers" from The Bay will not buy them their success. The Bay is moving on, hiring new talent and innovative thinkers. Eatons is paying excessively for "left-overs" and "had beens" from The Bay, Sears, and Holt Renfrew. This strategy will only benefit their competitors. The ultimate factor in the Eatons share moving upward is regaining, and gaining new, consumer confidence and loyalty. If their best customers were my grandparents, (and my grandparents are dead) and I find everything I want or need in a department store at The Bay or Sears, why should I shop Eatons? Eatons next move should be to ditch George and go fishing in a new pond of creative and high-energy talent - stop recalling the old war horses! Ultimately, at the end of the day, its going to be the cash in the register that determines the price of this stock, and the future success of Eatons.