Category: Articles

Ackman Pledges to Keep Target Shares 5yrs. if Elected

Post author By ToddSullivan
Post date May 26, 2009
1 Comment on Ackman Pledges to Keep Target Shares 5yrs. if Elected

As stated here before, I have no “skin in this game”. The sole reason for my interest in this is the message it hopefully sends to other corporate boards should Ackman be successful.

Hopefully there is little objection to the “corporate boards are unresponsive to shareholders” meme. That being said, a successful Ackman may spur changes at other boards if for no other reason the avoid a similar situation.

My main issue is with Target’s changing of their governance rules in order to entrench the board. Also, their refusal to publicly debate or discuss the ideas of their largest shareholder, while at the same time using press releases to snipe at the ideas he floats is more than a bit distasteful..

Read other ValuePlays post on this here, here, and here.

Here is today’s CNBC appearance.

Part 1:

Part 2:

Pershing Square Press Release May 26

Publish at Scribd or explore others: Finance Business & Law project PMP

Disclosure (“none” means no position):None

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Bernanke’s BU Speech and a Candid Admission

Post author By ToddSullivan
Post date May 26, 2009

Recently Fed chairman Ben Bernanke gave a speech to Graduates at the Boston College School of Law in which he said:

Instead, I’d like to offer a few thoughts today about the inherent unpredictability of our individual lives and how one might go about dealing with that reality. As an economist and policymaker, I have plenty of experience in trying to foretell the future, because policy decisions inevitably involve projections of how alternative policy choices will influence the future course of the economy. The Federal Reserve, therefore, devotes substantial resources to economic forecasting. Likewise, individual investors and businesses have strong financial incentives to try to anticipate how the economy will evolve. With so much at stake, you will not be surprised to know that, over the years, many very smart people have applied the most sophisticated statistical and modeling tools available to try to better divine the economic future. But the results, unfortunately, have more often than not been underwhelming. Like weather forecasters, economic forecasters must deal with a system that is extraordinarily complex, that is subject to random shocks, and about which our data and understanding will always be imperfect. In some ways, predicting the economy is even more difficult than forecasting the weather, because an economy is not made up of molecules whose behavior is subject to the laws of physics, but rather of human beings who are themselves thinking about the future and whose behavior may be influenced by the forecasts that they or others make. To be sure, historical relationships and regularities can help economists, as well as weather forecasters, gain some insight into the future, but these must be used with considerable caution and healthy skepticism.

Bold type emphasis mine..

Now this goes to a post herejust last week on the subject of the Fed’s forecasts.

The only question we could have then is, “if Bernanke admits the forecasts made by himself and other economists are equatable to a weather forecast, why are the making them so far out into the future and why aren’t we bring told they are essentially guesses”? I mean, even the weather man is not insane enough to be making prediction for next May, yet Bernanke and company are making them not only for next May, but the one after that.

Haven’t we learned yet that any economic prediction, push out to a year is not at all reliable, much as a weather forecast for that date would be? Even the weatherman is careful enough to preface what he says with “stay tuned tomorrow because things can change”.

Yet, when we read ANY of the Fed forecasts, they are delivered with such a certainty that one is lead to believe their belief in the accuracy of their predictions despite what we know to be the error rate (it is large). Now, there are those who will say they are required to make the forecasts they produce.

Then ought not the type of candor Bernanke expressed at BC be required when he is testifying before Congress and millions are being updated as to his every utterance? Since we are lead to believe he has a more exact idea of what the future of our economy holds for us than any other economist out there, if he truly believes in the inaccuracy of his profession, shouldn’t he lead with that disclaimer. Even us bloggers put them on our blogs…..

The cold hard reality just may be he does know more, but because he must put on a “happy face” so as to not start a panic, hides it from us all. This was the essence of my previous post on the subject and if it is true, is a worse scenario. The more his “predictive” abilities are wrong, the less faith anyone will have in him or the institution he presides over. When that comes to pass, a certain level of panic/doubt cannot be avoided…

Who knows, maybe we are already there???

Full Text

Disclosure (“none” means no position):

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Tuesday’s Links

Post author By ToddSullivan
Post date May 26, 2009

Foreclosures, Porsche, Nukes, Hyack

– 70% of “saved” homes………re-default

– Almost worked

– This is a really big deal folks

– Revisited

Disclosure (“none” means no position):

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Monday’s Links

Post author By ToddSullivan
Post date May 25, 2009

Music, Flip-Flops, Jim Rogers, Robert Reich

– All your music on your Blackberry FREE

– Say one thing and do another…

– Alex has a great site on Jim Rogers

– Looking at the problem backwards…Universites have >$340B in endowments…..how about lowering tuiton to reduce student debt?

Disclosure (“none” means no position):

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Sunday Viewing….Madoff via "Frontline"

Post author By ToddSullivan
Post date May 24, 2009

Frontline once again nails it…

Disclosure (“none” means no position):

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Saturday Viewing….PJ O’Rourke’s Satire (video)

Post author By ToddSullivan
Post date May 23, 2009

Disclosure (“none” means no position):

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S&P 500 PE: It Must Correct $$

Post author By ToddSullivan
Post date May 22, 2009

A constant theme here and really for any value investor is “price always meets value”. They just do. It is the “when” that we cannot predict but we know eventually it does. For that reason we buy when the value is above the current price and sell when it reaches or exceeds it. Easy right? Well, not really, it is the determination of what that value is that trips folks up and causes mistakes.

Thus is the dilemma of the current market. By any valuation it is way over valued. The S&P 500 last Friday after another quarter of reduced earnings (most are in now) sat at an stratospheric 122 times earnings. For those who are not sure what “normal” is, it is about 20 times earnings.

Here is the whole thing visually (from Chart of the Day):

So, that must mean the market is headed for a big fall, right? Well, there are two parts to the equation. The “P” or price and the “E”, earnings. In order to get the ratio down to a normal level the “P” must fall and the “E” must rise. Q1 earnings numbers were smacked by a -6% Q1 GDP. We know Q2 will be better and Q3 three ought to show even more improvement (both may still be negative but less so). That means we can expect the “E” part of the equation to increase.

With S&P earnings as of last Friday at $7.21, it will not talk much improvement for the PE ratio of the market to be brought down by even a modest earnings improvement. For reference, last year at this time the S&P had earnings of $62 and sat at 1400 vs 888 today. For the market to sit where it is and have its PE fall to around a more “normal” 20 times earnings, they must increase 485% to $45.

Again, visually, this is what has happened to earnings:

So, what happened to Q1? Companies wrote off billions in Q1 and used it as a “kitchen sink” quarter. We all expected it to be bad so they wrote down everything that had or might deteriorate in value. Q2 ought to show improvement if for no other reason the massive Q1 writedowns ought to be just about over. Even if operating earnings stay flat, we will see overall earnings improve.

Again, visually (click to enlarge): This is the S&P operating earnings.

Notice Q4 was the worst operationally and improvement is expect through the year. This is what to watch going forward. As long as this continues upward, the rest will wash out in the end.

It is fairly safe to say that the decline in earnings is or is near over and we ought to begin to see improvement. Note: this does not mean the overall economy improves immediately or dramatically, just that the decimation in earnings is done. Because of that, there is a very real scenario where the market just pauses and waits for earnings to catch up. Then, depending on the Q2 results as they come in, the next move in the market is defined. If they are as or better than expected the market will feel justified at its current level. Should they begin to come in worse, the high levels it currently sit at will indeed appear irrational and we could see a decent sized sell off.

Please know that I am not predicting what the market is going to do over the next two months, no of us know that. What I do know is that the current PE of the market is unsustainable and has to come down to more normal levels. The only way for that to happen is a rapid rise in earnings and/or an fall from the current levels of the S&P.

It also means the risk to current levels is downward. If we do not get increasing earnings, the market has to fall to regain valuation balance. If we do get modestly increasing earnings, it could sit here while the earnings take down the valuation disparity. Either way, the markets upside is limited to down.

One then has to extrapolate from this that the market could continue its upward march if we get a large increase in earnings in Q2. That would justify the
recovery theme currently “en vogue” and reduce the market valuation in one step. All eye then turn to continued improvement in Q3 for continued market appreciation.

In talking with “Davidson” about the subject yesterday he said:

That is the way it happens. Markets that move ahead of earnings are always called “speculative”. It is a question that value players would answer that they buy on P/Assets or P/BV but sell on earnings expectation or P/E when the earnings come in.

A quote from Ian Cumming from the Leucadia (LUK) annual meeting I went to. “The science is in the “In”. The poetry is in the “Out”. The value buyer assesses the potential earnings power of the assets, but buys when there are no or at least very low earnings and the market not having the sense to do the same type of work is lost in the pricing and giving stocks away. But, when the earnings are at full potential and have recovered, the market believes that some new earnings trend has begun and priced the stock at “poetry levels”-“so beautiful” and it is this is where one should sell.

So what to do? Be careful. Something has to happen either way and two of the three scenarios have the market doing nothing to falling.

Disclosure (“none” means no position):

Tags davidson

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According to Target’s Guidelines, 2 Directors Must Resign $$

Post author By ToddSullivan
Post date May 22, 2009

Interesting development just days before the Target (TGT) proxy vote…

According to Target’s Own Governance Guidelines,
Two Directors Should Step Down Promptly

NEW YORK, May 22 – The Nominees for Shareholder Choice commented today on recent developments concerning corporate governance issues at Target Corporation (NYSE: TGT).

Under Target’s Governance Guidelines – which are based on principles articulated by Target’s former CEO and founding family member Kenneth Dayton – two current members of its board, Solomon Trujillo and Anne Mulcahy, are required to tender their resignations promptly, making room for directors with relevant experience and fresh perspectives. In light of the on-going proxy contest, the Nominees for Shareholder Choice expressed concern that the company has not made any public disclosure regarding each of these incumbent directors’ resignations under the company’s Governance Guidelines.

Two Incumbent Directors Should Resign Promptly
According to Target’s Governance Guidelines

Incumbent director Solomon Trujillo (who is currently running for re-election to the Target board) has recently been asked to resign as CEO of Telstra, the Australian telecommunication company that he headed. In addition, yesterday, Xerox Corporation announced that incumbent director Anne Mulcahy has stepped down as CEO of Xerox. Under Target’s Governance Guidelines, as a result of changes in their principal employment, Mr. Trujillo and Ms. Mulcahy are required to promptly submit their resignations. Target’s Governance Guidelines provide as follows:

“Changes in Director’s Principal Employment – Any director (including management directors) whose affiliation or position of principal employment changes substantially after election to the Board will be expected to offer to tender his or her resignation as a director promptly to the Board. The Nominating Committee shall make a recommendation to the Board on whether to accept or reject the offer, taking into consideration the effect of such change in employment on the director’s qualification as an independent director and on the interests of the Corporation.”

Given the clear mandate of Target’s Governance Guidelines, Target should disclose whether either or both of these directors have submitted a resignation, and whether the board intends to delay taking action on their resignations to thwart the effective exercise of the shareholder voting franchise at the upcoming annual meeting.

Ronald J. Gilson, a renowned corporate governance scholar and a Nominee for Shareholder Choice stated, “The board and nominating committee know that board policies require members to offer their resignations when their principal employment changes substantially. It is poor corporate governance to deprive shareholders of the opportunity to choose successor directors to Mr. Trujillo and Ms. Mulcahy.”

Trujillo Era at Telstra

Mr. Trujillo’s departure from Telstra has been widely reported in the Australian press. A recent article in The Australian IT entitled, “Quiet Last Supper for Sol,” observed that under Mr. Trujillo’s leadership, Telstra’s share price declined materially, its relationship with the Australian government became severely strained, and a $12-billion IT transformation program originally lauded by Mr. Trujillo was over-budget and over-time with little results to show for it. The Australian IT quoted an analyst as saying, “The Sol Trujillo era at Telstra will be characterised by $15 billion of shareholder value destruction, uncertainty around the outcome of his much-heralded transformation program and customer satisfaction at an all-time low.”

The Nominees for Shareholder Choice believe that the circumstances surrounding Mr. Trujillo’s departure from Telstra suggest that, after a 15-year long tenure on the Target board, it is time for him to give up his seat to make room for a director with fresh perspectives and more relevant experience.

Despite Mr. Trujillo’s departure from Telstra, not only has Mr. Trujillo apparently failed to tender his resignation, but instead the company’s nominating committee and board have nominated him for yet another three-year term at the upcoming annual meeting. Mr. Trujillo’s nomination comes after multiple extensions of Target’s director term limits – which have increased from 12 to 15, and more recently to 20 years – in an apparent accommodation to Mr. Trujillo who is the only incumbent director who would have been immediately impacted by the prior 15-year term limit.

The Nominees for Shareholder Choice believe that Mr. Trujillo’s continued board candidacy is emblematic of the erosion of the governance principles first articulated and implemented by Target’s founding family member and chairman Kenneth Dayton decades ago.

The Nominees for Shareholder Choice are of the view that under these circumstances, if he has not done so already, Mr. Trujillo should promptly submit his resignation, and the Target’s nominating committee and board should accept his resignation and withdraw his nomination. The resulting vacancy should be filled by a vote of all shareholders at the upcoming meeting. According to the express terms of Target’s Governance Guidelines, Ms. Mulcahy must also promptly submit her resignation.

Now the whole resigning thing isn’t really the issue as the nominating committee could have recommended the Board not accept it. The problem is, and this is actually more disturbing is that so close to such a contested proxy vote that the Board and the Nominating Committee chose to ignore Target’s own rules.

One has to assume they rather not draw attention to potential issue with current members so close to the vote and give shareholders a possible reason to not re-elect them. I have a real hard time believing it was any type of over-site on their part also. It really does not pass the smell test…not even close..

Pershing’s Ackman has been on record questioning Target corporate governance…..they just gave his gas to add to his fire…

Read Former Board Member Bill George’s rebuttle to Ackman written yesterday. It now reads as more that a bit ironic given today’s events..

Disclosure (“none” means no position):None

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Taubman: "No Distessed Sales at General Growth" $$

Post author By ToddSullivan
Post date May 22, 2009
3 Comments on Taubman: "No Distessed Sales at General Growth" $$

There has been a ton of speculation out there that General Growth would be forced to dump holdings on the cheap, reducing the odds of equity preservation in the Chapter 11 process. This ought to dump some cold water on them…

When you take this and the recent TALF news, things are looking better for shareholders daily..

From Bloomberg:

“Even with a distressed owner of a good quality regional mall asset, you rarely, rarely see distressed pricing of those assets,” Chairman and Chief Executive Officer Robert S. Taubman said in a telephone interview. “If you’ve got a great one, no one’s going to want to sell an asset like that at a distressed price.”

General Growth (GGWPQ) filed for Chapter 11 bankruptcy protection last month after amassing $27 billion in debt during an acquisition spree that made it the second-largest U.S. shopping mall owner. Taubman’s comments echo those made last month by hedge-fund manager William Ackman, whose Pershing Square Capital Management LP owns about 25 percent of Chicago-based General Growth. Ackman said the probability of competitors “buying any of General Growth’s properties on the cheap is zero.”

It continues:

Taubman, whose Bloomfield Hills, Michigan-based company (TCO) has 24 regional malls, said the court likely will support a plan by General Growth management to keep the company’s portfolio together and emerge from bankruptcy without selling off a large number of properties.

“Maybe on the margin an asset will leak out,” he said in an interview from the International Council of Shopping Centers convention in Las Vegas, where his company is meeting with retail tenants. Even so, the predictable income offered by regional malls such as those in General Growth’s portfolio will attract buyers willing to pay the full price, Taubman said.

“There are enough buyers out there,” he said. “You’re never going to see a genuinely distressed price.”

This further bolsters to “asset” part of the equation in the eternal “are assets > liabilities” argument. It is key because depending on the structure of the 11 process, having assets > liabilities is key for shareholders remaining partly or totally whole when all is said and done.

Usual disclaimer. This is a highly speculative bet that depends greatly on the whims of the US legal system. You must be prepared to lose 100% (or close to it) in this investment before you invest. BUT, if we are right (I think we are)……..wow will it be good…

Disclosure (“none” means no position):Long GGWPQ, none

Tags ackman, ggp

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Friday’s Links

Post author By ToddSullivan
Post date May 22, 2009

Oil, California, Retiring?, France….We are it

– A look at price

– A mess….. no other words for it

– Here are the “Best Places”

– Another small biz killer

Disclosure (“none” means no position):

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Sears Holdings Laps Estimates, Extends Credit Facility $$

Post author By ToddSullivan
Post date May 21, 2009
1 Comment on Sears Holdings Laps Estimates, Extends Credit Facility $$

Looks like another nails in the coffin for those calling for the demise of Sears Holdings (SHLD)

Q1 Earnings
Sears Holdings Q1 Earnings

Publish at Scribd or explore others: Finance Business & Law sears holdings eddie

For those who do not want to read the release, important items:

1- We had cash balances of $1.2 billion at May 2, 2009 (of which $515 million was domestic and $734 million was at Sears Canada) as compared to $1.4 billion at May 3, 2008 and $1.3 billion at January 31, 2009. For the quarter, the significant uses of our cash included $40 million for share repurchases, $76 million in capital expenditures, and $52 million of contributions to our pension and post-retirement plans. $465 million of common shares under the share repurchase program remain still available

2- The credit facility, the assumed reason Sears would self destruct as the dooms-dayers said it would not be refinanced or would be on onerous terms was, and at terms better than the previous one in terms of assuring more than ample liquidity for Sears.

Disclosure (“none” means no position):Long SHLD

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Nielsen Finds US Consumer Still Retrenching $$

Post author By ToddSullivan
Post date May 21, 2009

The new Nielsen Global Economic Scorecard, released yesterday, shows that consumer activity in the United States and China showed significant declines during the month of March—despite optimism for economic recovery.

Additional findings include:

March marks the ninth straight month of declines in unit sales in the U.S.
The Canadian market remains resilient and dollar and unit sales continue to increase.
In Western Europe, March showed evidence of slowing transaction size.

Here are the results for the US:

Full Report Here:

It is pretty clear things are not in a free fall anymore. At the same time, talk of “recovery” is probably more that a little bit premature. As long as the consumer is saving more and spending less, recovery is still going to be elusive. Now, for an over-leveraged consumer, that is just the thing they should be doing. It just is not conducive to economic growth.

What will most likely happen is we fall to a level, somewhere below where we are now and then rather than rise, that level becomes the “new normal” for activity for a while consumers continue to reduce debt.

Note: This a several year long event, not a quarter or two. Two decades of a credit card mentality cannot be rectified overnight…it will take time.

The consumer is doing the right thing though…

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AAA CMBS Market’s Improvement & General Growth Implications

Post author By ToddSullivan
Post date May 21, 2009
2 Comments on AAA CMBS Market’s Improvement & General Growth Implications

Much of this is due to the recent decision from the FED to make CMBS eligable to TALF backing. Whatever the reason, the CMBS market has made a stunning reversal from the end of 2008

From Markit:

Markit, a financial service firm, is described as a leading provider of industry data and pricing products and services that are used globally by more than 250 asset management firms to help them monitor risk, mark-to-market, develop accurate forecasting models and asset class benchmarks.

Markit released the following chart of their AAA(Triple A) Commercial Mortgage Backed Securities Index that had been previously issued at 100(par). These securities are representative of those on which market professionals have expressed great concern regarding the lack of available refinancing options in the current credit environment. This concern was recently underlined by the declaration of bankruptcy of General Growth Properties (GGWPQ) which was viewed by many as having adequate cash flow with which to fund the interest payments on current debt, but could not find a lender to refinance the debt that it needed to roll over. Farralon recently provided Debtor in Possession (DIP) financing.

It may be the fact that Farralon and Pershing Square competed to offer financing with the net effect that General Growth Properties was acknowledged to have received a better agreement that had been previously expected that has begun to shift expectations regarding CMBSs. It is too early to offer an explanation for the dramatic improvements in market sentiment as seen in the chart below for these securities. But, certainly a positive shift has occurred since early March 2009.

This is one piece of information in a sea of swirling bits and pieces and one observation does not make a trend. Even the multiple observations that have been evident since December 2008 which appear to reflect a strong trend of economic recovery do not permit one to forecast with certainty that the trend will continue. Such, has been the impact of unforeseen events of the magnitude of 9/11. What can be said is that there is historical precedent that this trend which appears quite similar to previous recoveries has a high likelihood of continuing.

The typical pattern is:

First, there is a psychological recovery as reflected in stock and bond markets as investors are willing to buy into risk in anticipation of recovery. During this period many continue to bemoan the lack of fundamentals to support investment activity and the media continues to provide time to those whose forecasts continue to be bearish. If markets continue to improve, the costs of financing are reduced by lower bond yields and higher stock prices and businesses and market participants eventually resume activities that eventually result in profits.

For business recoveries no one rings a bell, it is a process. The pattern is psychology first, fundamentals second. This chart reflects improved psychology. If so, then the refinancing risk for existing commercial debt is diminishing.

The trend begun December 2008 continues.

The importance of this on the GGPWQ Chapter 11 cannot be understated. Anything that causes the CMBS market the strengthen does two things. It enables lenders to more easily sell refinanced debt & in essence encourages them the do just that rather than having them position themselves to replace said debt with equity. It also places a floor on CRE prices and by default, properties that General Growth may decide to sell. The more money received from any asset sales increases the odds of equity survivability.

The Fed said in announcing the facility “”The inclusion of CMBS as eligible collateral for TALF loans will help prevent defaults on economically viable commercial properties, increase the capacity of current holders of maturing mortgages to make additional loans, and facilitate the sale of distressed properties,”. Emphasis mine..

It is not a big leap to then say that those properties of General Growth that were commercially viable at the time of the filing (the vast majority) would then stand a chance of TALF backed refinancing in Chapter 11. If this is then true, the outlook for the equity then increases. Now, a lot can happen between now ans next year when this stuff start getting taken care of. Properties that are performing today may just as well see performance deteriorate as they may see it improve and their lies the $27B question.

Remember, it was not the operating performance of General Growth that drove int into Chapter 11, but the lending markets. In December of 2008, then Treasury Secretary Paulson was told in a letter from a dozen commercial real estate trade groups “Right now, we believe there is insufficient systemic capacity to refinance expiring, performing commercial real-estate loans,”.

My thought has been and still is General Growth’s operations will be performing better and there will be plenty left for shareholders.

Disclosure (“none” means no position):Long GGWPQ

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Is Kohl’s the "New" Target?

Post author By ToddSullivan
Post date May 21, 2009

I was on Twitter yesterday and came across the following tweet from @TalkRetail:

Impressed by Kohl’s. Despite low-cost model, gleaming store & lots of style. Can anyone here speak 2 their product quality?

One of the respondents to the question said:

My wife buys clothes for all 4 of our kids there. Stores all over here in Dallas. Nice mix of price/quality. $KSS

Instantly I got to thinking, “where have I heard that before?”. Oh, yeah, it was how people described Target (TGT) a few years ago. So I began asking around. The typical comment was that “Kohl’s is like a Target without the food/grocery but better bargains on clothes”. Hmmmm

So, then I started looking closer. In order to do this, we have to look apples to apples. This was a little tough because we are going to look at monthly same-store-sales data and that means we are at the whim of what the company decides to report. For Kohl’s (KSS) it is easier because we are using the the whole business, it is tough for Target because we need to find the similar segment date in order to make the comps mean anything. Including Target’s electronics of grocery segments in the comps make the exercise meaningless.

I am using Target apparel and home sections as those two segments essentially cover all of Kohl’s. I am also going back 5 months because based on what I am hearing, this is not a long term trend but a more recent one.

What did we find?

December:

Target: “Both the apparel and home assortments experienced high single-digit comparable-store sales declines in December” Release

Kohl’s: “On a comparable store basis, sales decreased 1.4 percent.” Release

January:
Target: “Comparable-store sales in apparel declined in the low teens overall” & “Comparable store sales in our home assortment declined at a high single-digit rate” Release

Kohl’s: “On a comparable store basis, sales decreased 13.4 percent.” Release

February:
Target: “Comparable-store sales in apparel declined in the low double-digit range,” & “Comparable store sales in our home assortment declined in the high single-digit range,” Release

Kohl’s: ” On a comparable store basis, sales decreased 1.6 percent.” Release

March-
Target: “Comparable-store sales in apparel declined in the low double-digit range,” & “Comparable-store sales in our home assortment declined in the low double-digit range” Release

Kohl’s: “On a comparable store basis, sales decreased 4.3 percent.” Release

April:
Target: “Comparable-store sales in home and apparel declined in the high single-digit range” Release

Kohl’s: “On a comparable store basis, sales decreased 6.2 percent.” Release

Not in a single month has Target apparel/home sections bested Kohl’s peformance. It appears they may have achieved a draw for two months, but that does not make up for the abysmal discrepencies the other months. Now, they are both experiencing declines like the rest of the retail world but Kohl’s is decidedly hanging on to more of its clothing shoppers.

Fashion, in particular womens was what fueled the Target growth. If you look at some of the releases you’ll see womens apparel down 20% in some months, stunning.

Am I saying that Kohl’s is going to overtake Target someday soon? No. What I am saying is that I am hearing the same reasons for shopping at Kohl’s today that I heard for shopping at Target a few years ago. What’s worse? I no longer hear those things associated with Target anymore.

This is a double whammy for Target. It is already clear they have lost the “consumer value” proposition to Wal-Mart (WMT) based on all evidence and are falling farther behind the industry leader. Now they may be feeling heat from behind on the “fashion” end from the likes of Kohl’s.

This is worth watching down the road to see if as the economy recovers, the two companies apparel result continue this disparity..

Disclosure (“none” means no position):none

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Latest Wall St. Media Appearance

Post author By ToddSullivan
Post date May 21, 2009

Talkoing about oil (USO) and some options in it..