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Non-Tech : TRND -- Back from the Dead? -- Ignore unavailable to you. Want to Upgrade?

To: Mark T. Heath who wrote (9)	12/31/1998 8:22:00 AM
From: BMcV	Respond to of 57

>>My first impression was why take on Home Depot? Look where that has gotten HQ.<< TRND doesn't really try to take on HD. Their stores are much smaller and specialized. Our HD has a huge selection of rugs and tiles and building materials, and a corner with some power equipment and hand tools. If you want a selection of saws and some advice on what you need, HD doesn't have either. And once you've got your saw or router, where do you go for that jig or special bit? Not to HD. That said, there's no doubt to my mind that the tremendous volume the superstores do has damaged TRND's margins. A friend bought a saw at WW, saw it advertised elsewhere cheaper, returned and got $30 back, no questions asked. That can't help. Another advantage for WW is that since their stores are small, they can cover more markets than HD. They can and do close stores, relocate stores, change formats (from WW to GD), to weed out the unprofitable ones. In their annual report, they estimate the cost of opening a new store at $350,000, including $290,000 inventory -- so you can see there's not a lot of money tied up in any location, unlike a superstore, with its building, parking lot, etc. (Those figures are for WW, for GD they are $425,000 / $300,000.) Finally, since 1994, sales have increased about 15% annually: 1994 $99,958 million 1995 $128,332 million 1996 $174,795 million 1997 $208,582 million 1998 $231,143 million Those figures include catalog sales. Here are the retail sales: 1994 $26,457 million 1995 $52,578 million 1996 $98,515 million 1997 $140.342 million 1998 $171,612 million Here's what the company says in its annual report: "Our largest competition comes from home centers and hardware stores (...). However, we tend to specialize in the upper-end of the market. As a result, we often locate our stores in close proximity to major competitors to emphasize the breadth and depth of our selection and to benefit from traffic flow." Whistling in the dark? Maybe, but the sales figures bear them out, to some extent. The problem has been sustaining profitability. As far as GolfDay goes, it looks like TRND did buy only some stores in the Northeast: "Effective 1/1/98, the company acquired 13 Neveda Bob's franchised stores located in the New England area from a private investment partnership." They say elsewhere that they changed the name of the stores they acquired to GD, so anything with the Neveda Bob name must belong to someone else.