Why is inverted yield curve good for Reitmans? Why is high inflation and an inverted yield curve good for Reitmans? Doesn't that mean we are going into a recession where consumer discretionary gets cut first?
There is going to be a money losing e-commerce washout. Companies will need to be self funding. Survival check list:
Has cash? Yes, lots of it!
Owns warehouse? Yes, rents sky rocketing.
Labour intensive? No (good luck finding labour for your restaurant)
Capex intensive? No (This is important. As competition for retail space declines during a recession a company like Reitmans who is in the middle of a rebrand can negotiate bigger spaces with better tenant improvement allowances. Make PENN the place)
Derisk e-commerce? Fire worst customers. Free shipping for loyalty members with certain amount of points otherwise $100 minimum. Don't pay return shipping unless loyalty members with certain amount of points. This will encourage store returns.
I don't see any reason why Reitmans is not doing over 1 billion dollars in revenues over next 7 years with a $20 stock price.
Capex intensive? No