For anyone holding DJ and Myer stock

[Billy01]

http://www.ft.com/intl/cms/s/0/c4096aee-5e82-11e2-a771-00144feab49a.html#axzz2I3bUk5ru

This would be worth a read

The above mentioned companies don't have a good online offering and they too have missed the beat of a generation IMHO.

5 years ago would never have thought of HMV going bust.

I do not think I'll just pop over to the DJ's website to check out the price of kettles.

Nor do I walk into a store and give the CEO's my money

I go to the brands I know in Aust that will give me online user experience, price and service.

As a plus they bring it to my door and entice me to buy more.

The above dinosaurs have a lot of work sponsoring the races to get the tablet generation to their website.

Ebeneezer Goode "lovely" Gerry Harvey should stand at the door and pray his customers take them.

And yes you can argue the UK is in a deep recession etc etc. Who cares? The headline is a representation of our shyte ceo's doing a shyte job even playing catch up.

 

[snoopy]

Article asks for login.

With HMV though it is in a category that is toast, real world music sales. I'd say this is comparable to Brash's going bust. Who buys CD's, online, offline, anywhere? Maybe old people or someone who wants to give a present or have the actual disc, but I'd say the market is limited and gradually getting smaller. I'm not a big music buyer myself but I'd say I've bought 1 cd in the last 5-6 years.

 

[Billy01]

Australian Retail Stocks

http://www.telegraph.co.uk/finance/...administrators-putting-4350-jobs-at-risk.html

Lets see where Aust is at in 12- 24 months time? I don't proclaim to know Everything.

I can't see too many analyst reports telling us our CEO's have it right though.

Lost a generation IMHO, end of story. Dinosaurs are dead.

How many of you under 40 think I'll go to DJ's website and compare some prices?

 

[Billy01]

Deloitte Report: Retail revenues rebound despite global downturn

http://www.prnewswire.com/news-rele...ebound-despite-global-downturn-186756881.html

Our local retailers with their heads in the sand for the last decade should be worried.

You don't see Topshop or Zara looking for customers in bricks or clicks.

http://www.abc.net.au/news/2013-01-...espite-economic-woes/4465338?section=business

Once again shyte Aussie CEO's doing a bad job trying to catch up and it won't happen.

 

[Chris.C]

LOL I'm sensing a lot of hate Billy...

I wouldn't completely right off Australian retailers - music and book retailers are a whole different story.

Billy you need to remember that DJ's, Harvey's and Myers are still profitable companies in their own right. None of them have lost money in the last decade despite the growth of the interest...

Yes they might be losing some market share, and not growing like they used to, but at least they now "get it" and whilst they might be behind the times what they do have is boatloads of money. They are billion dollar companies remember, if they are smart they might be able to acquire online market share or hire some people that have a clue.

So I don't think these companies are going anywhere in the next 5 years, they make not make record profits or achieve great ROE but they probably won't be going broke either.

Whilst the internet brings change, it doesn't bring change THAT fast.

 

[Billy01]

Disdain on CEO's

I'm sensing disdain(as Aussies should) who have these retail stocks in their super portfolios for not seeing what was taking place 12 years ago.

Good points but no sympathy to the ceo that gets it in the neck from ignorance.

 

[snoopy]

How many of you under 40 think I'll go to DJ's website and compare some prices?

That isn't the market they want though, they were never the cheapest or anything close to it with their real world stores. For these stores not getting the "price comparing" market is a given. You can be the cheapest or you can offer high quality service, but you can't be both.

They've largely missed the boat with online sales but your comparison with a music retailer isn't a good one.

 

[findtim]

i have 4 teenage + nieces and nephews and the thought of purchasing anything for them was not given a chance, we opt out by just giving itunes gift cards which i think many people do.

i just got back yesterday from 4700klms of driving travel mel-bris and back via various routes, i saw medium and small towns dying, closed shops, for rent signs everywhere, real estate agents closed down, "tumbleweed" down the main streets.

myer recently opened what i think is their smallest EVERY store at my shopping centre ( fountain gate) [don't hold me to that comment]

why are we concerned about bricks and mortar? nobody seems to be speaking about the amount of money spent but just the transfer of how it is spent so what really is the issue? if you see it happening sell your shares.

when consumers stop consuming thats when i will worry.

tim

 

[Chris.C]

Also something that isn't being discussed is "stock" investments have very little to do with whether a company has a good website or not.

I think people need to be really careful when making blanket statements about companies being bad investments.

Whether something is a good or bad investments is most importantly a function of price. Everything is a good investment at some price (just most domains are a great investment at some price).

To make my point, if I had to buy stock in either Myers or Amazon and couldn't sell it for 10 years I would hands down choose Myers!

• Myers share price is currently trading at 9.6 times earnings.
• Amazon share price is currently trading at 3250 times earnings.

What that basically means is that over the next 10 years (assuming the typical discount rate of 6.25%):

• Myers's earnings (unadjusted for inflation) are priced to fall by 0.4% every year for the next 10 years making it about the same profitability that it is today.
• Amazon's earnings (unadjusted for inflation) are priced to grow by 70% every year for the next 10 years to be 200 times as profitable as it is today!

Now what's important to realise is that over the last 3 years Myers has grown its earnings by 30% while Amazons earning have actually fallen by 31% in the last 3 years...

So if I HAD to invest all my money in one or the other for the next 10 years I'd be investing in Myers.

Food for thought.

 

[findtim]

i vote Chris C for the official position of "DNT Mathematician".

tim

 

[James]

Its not that Myer or DJ's are not doing online well, who is to say they do not have the best people in the business working for them?
You always seem to make these threads with "here say".

The thing with any big business is they TAKE TIME to get things done, I have worked with numerous big businesses in Australia over the years, you can not walk in and change things over night, it will never work like that EVER!! For example choosing a CMS takes months if not years, selecting an advertising agency takes months. Simple changes take a long time to do, it is because the sheer size of the business.
If you look at Myer's and DJ's it is evident that they have been trying with online for years.

I was even at an event recently and Senior execs from Harvey Norman were speaking positively for online and what they have been doing. But the thing is why would Harvey Norman suddenly invest heavily on online and do heaps of PR to push online? The thing is they have all these country stores who would be very pissed off if they started investing heavy online wouldn't they.

It is not like a start up where they can just go out and hire 10 interns, slap up a e-commerce site on Magneto and bang out a online store.

 

[findtim]

HN country stores pissed off:

Helena went into our target store before xmas to buy a new car seat for max as she saw the online price but as its only a few minutes to a store she went to "just go get it" , the store price was $30 higher even after delivery from target.com.au so she asked a staff member who gave a very pissed off answer like " we have nothing to do with the online site"

so we ordered online, got it the next day cheaper then the shop 3 minutes downt he road.

i think there needs to be some "conversations" happening at target to staff.

James i agree things take time but Sh*t ! i've been building ecom sites since 2001, i think they have had time, i have no sympathy for them.

tim

 

[Chris.C]

• Myers's earnings (unadjusted for inflation) are priced to fall by 0.4% every year for the next 10 years making it about the same profitability that it is today.
• Amazon's earnings (unadjusted for inflation) are priced to grow by 70% every year for the next 10 years to be 200 times as profitable as it is today!

I just re-read my post and realised that sometimes numbers don't always give the full picture unless put into context.

So for Amazon to increase its earnings 200 fold would mean that its total earnings would be equivalent of Apple, Google, Microsoft, IBM and Oracles earnings combined (and these are 5 of the top 20 biggest companies in the world)... and they only have 10 years to pull that off!

Good luck.

Chris C for the official position of "DNT Mathematician"

At the end of the day it's the numbers matter.

 

[Billy01]

amp-gets-fired-up-on-bosses-pay

http://www.smh.com.au/business/amp-gets-fired-up-on-bosses-pay-20130115-2crig.html

They do mention a certain retail company but I'm sure those execs are fine. Phew!

 

[Adrian]

Now what's important to realise is that over the last 3 years Myers has grown its earnings by 30% while Amazons earning have actually fallen by 31% in the last 3 years...

The only thing is that Myer's earning haven't really grown by 30% at all. 2012 vs 2009 saw paying down debt "boost" earnings by ~$50m. Also a $23m addback in 2012 helped to boost the profit as well. Underlying EBIT (better measure) went from $236m in 2009 to $212m in 2012.

And underlying changes suggest Myer has a lot of difficult things to deal with.

Amazon I don't know as well, but it hasn't had the best recent run in financials, but at least it runs a lower cost operation and is building significant competitive positioning with things like Kindle. Somehow I think Amazon will be the stronger company in 10 years time. (Perhaps Amazon should buy Myer to give an earnings boost! Although it wouldn't make an impact at all).

 

[Chris.C]

Don't get me wrong I wouldn't buy either at their current prices. And I'm not saying Myer is a good investment at all!

Frankly I wouldn't touch Myer with a 10 foot pole, it's revenues have dropped nearly 20% over 3 years.

But I'd also never buy Amazon at this price in spite of the fact that its revenues have increased 100% since 2009.

And I agree Amazon has "potential" to be a rockstar - and in the last 5 years I have spent probably 10 times more with Amazon than I have with Myer (and that is really saying something given that Amazon isn't even in Australia), but Amazon has yet to be able to turn their "great low cost business model which is great for customers" into a "great low cost business model that is great for customers AND shareholders".

And don't get me wrong I think there is a good chance they will grow substantially maybe double, triple, even quadruple their earnings in the next 10 years which is a spectacular achievement in anyone's books, especially given that Amazon operates on margin of like 1% while companies like Myer still get 10% margins, but for them to go 10x, 20x, 50x... I think that's just speculating.

And at the end of the day Amazon's share price is already pricing in this astronomical growth, and whilst I think they are a "chance" I definitely don't think they are a "certainty" of achieving expectations.