Forum Archive Index - February 2004

["Karyn W" <karyn_in_oz@hotmail.com>]

Well, its no suprise to those of us who live in Australia that the WHS 
Aussie operations are peforming even worse than last year.

I remember reading a book about Warren Buffet, who when he wanted to know 
which retail stocks to get into or out of, he would go down to the local 
Mall with his kids, and look at which stores had the most people in it, and 
was making the most sales.  (For the record, this is how he first discovered 
The Body Shop as an investment).

I figure if you live in a city the size of Melbourne, and you have never 
seen a Warehouse store, do not know where the nearest one is, and have no 
compelling reason to find out and visit one, this is not going to be a 
successful retail venture!  Their advertising is crap, because they have no 
products of any value to advertise.  Believe it or not, one of their latest 
TV ads was for garden gnomes!  Boy, the freeways must have been congested as 
the public stampeded the nearest WHS store for that deal of the century!

"The retailer said weaker than expected sales growth, poor product mix and 
merchandising and marketing issues would result in its Australian operations 
incurring a steeply increased full year ebita (earnings before interest, tax 
and amortisation) loss of between A$30 million and A$40 million ($33.98 
million and $45.31 million). The Australian businesses turned a loss of 
A$11.9 million during the last financial year. "

What a surprise!
Question is - what are they going to do now?  18 months of restructuring and 
"turn around" strategy has only seen the business due to make 3-4 times the 
loss that it did last year!  Perhaps Tindall should read the post here about 
having a good "exit strategy"

Karyn

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