Reitmans Ord Shs V.RET

My perspective on business

[TheCount11]

We live in a nominal world and the marginal Canadian has been spending more money on Non Discretionary like food.  Lower Middle Class incomes are still rising.
 

Gross profit / margins tell you what consumers think of the brands. Year to date Gross Profit of $316.1M with 55% margins tells you Reitmans is not dead especially during these inflationary times where food prices have increased dramatically.  Management is doing a decent job here.

By my channel checks it seems like the physical store network with 401 stores is profitable.  Rent was $30M while store sales were $426M.  From my experience stores are not over staffed.  There is scale as retail store network is not labour intensive and rent is paid once. 

E-commerce shipping is paid every time, transaction size is important and returns are a loss. Reitmans scaling e-commerce will scale loses unless management changes return policy.  Seems like companies need to keep advertizing to reaquire customers.