RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Air MilesAll brick and mortar retailers today are facing negative headwind of declining mall business. Just guessing here, Reitmans, from what I can recall, is a mid-lower end brand and could be in malls with declining traffic. ATZ, on the other hand, is a premim brand and in class A malls and fashion locations. Also, their online business is doing extremely well as a younger audience is more accepting of buying fashion virtually. As a short term deep value play though I can see the attraction in RET. Good luck.
nedstar71 wrote: I bought some Reitman's just at a couple of weeks ago. Trading at potentially less than 1x earnings is unheard of.
babedinkleman wrote: ATZ is having some big growth for sure. Too rich for my blood though. If you have the time....while it doesn't have the same growth rate or as sexy it's definitely worth having a look at RET/RET.A and compare the revenue and earnings numbers to ATZ....then look at the market caps.....different target consumer and not as exciting but I think it's a $10 stock easily .....trading as damaged goods after emerging from creditor protection and now on the V exchange. Probably won't get real traction until it moves back to the big exchange....but even where it is it should be trading at $3-5 in a bad market.
flamingogold wrote: Thanks for chiming in. I am relatively new to DIV, good diversification but in need of a portfolio shuffle soon. Also, not a big follower of women's fashions, although my daughter has pointed me towards ATZ which she claims is like a cult among young women... sort of like LULU and they are slowly expanding into the US. I have been flipping it this year on small gains and trying to get back in each time at a lower entry but not so easy. No debt and earnings are always stellar. Maybe they get whacked on something like inventory build but so far they are knocking it out of the park.
babedinkleman wrote: In actuality....Reitmans might be a better target for a company like Canadian Tire. They already own workwear in Marks.....sportswear in Sport Chek.....a lower priced women's clothing chain that is just killing it would fit right in.
babedinkleman wrote: I doubt they'd be interested.....DIV wants hands off royalty streams. Not to mention it would take what.....$4 a share minimum to buy it....translating to a purchase price similar to DIV's market cap. DIV has no real cash to speak of....no way they should be taking on anywhere near that much debt with interest rates spiking.....let alone the complications that go along with HOT.UN.
DIV basically buys trademarks for the most part......not full blown businesses. I say Diversified should wait until the recession takes hold and then pick up some bargains.....instead of doing what they have done in the past....doing deals just before things falls off a cliff. Buying anything at this particular time and the dilution or debt required to do so wouldn't be looked upon as a good move.
On the off chance they were to do that type of transaction....a company like Reitmans would be a much better bet and would be more in their affordability range market cap wise. Went the creditor protection route a while back.....now has a clean balance sheet and just killing it. Trading at less than 2 bucks and did 76 cents in profit last quarter.