texual Posted March 18, 2015 Share Posted March 18, 2015 The SHLD story continues. Link to comment Share on other sites More sharing options...
20ppy Posted March 18, 2015 Share Posted March 18, 2015 Sears has offered to pay some vendors within 15 days, faster than its normal terms of up to 60 days for suppliers of apparel or hard goods, in return for a discount of around 3% to 5%, one of the people said. http://www.wsj.com/articles/sears-tries-to-calm-supplier-jitters-1426695596?mod=yahoo_hs&mg=id-wsj Link to comment Share on other sites More sharing options...
BTShine Posted March 18, 2015 Share Posted March 18, 2015 Hopefully all the vendors accept, or am I missing something, wouldn't a 3% to 5% discount just hit the bottom line? Link to comment Share on other sites More sharing options...
Luke 532 Posted March 19, 2015 Share Posted March 19, 2015 http://blog.searsholdings.com/shc-updates/response-to-wall-street-journal/ COB&F shout-out? :) The subject of this blog could have simply been, “Look Closer.” Why? Because people who are really taking the time to digest the information we make public are seeing trends like what this post details. We also understand that if you’re not looking at our company closely, a lot of this can be hard to understand. Link to comment Share on other sites More sharing options...
Against the crowd Posted March 19, 2015 Share Posted March 19, 2015 The WSJ reporter just showed her lack of business skills. Anybody operating a business would love to get additional discounts from vendors if the cost of paying faster is less than the overall discounts received from the vendor. It is a simple calculation. That is why there are cash discounts available to customers who pay in 10 days rather than 30 or 45 0r 60 days. Isn't 2 and 10 a standard payment terms in many countries where you can get 2% discount on your bill if you pay in 10 days instead of regular 30 days credit period. Link to comment Share on other sites More sharing options...
Luke 532 Posted March 19, 2015 Share Posted March 19, 2015 The WSJ reporter just showed her lack of business skills. They're primarily journalists, not business people. Just like the journalists/talking heads for CNBC, Bloomberg, etc. Link to comment Share on other sites More sharing options...
Against the crowd Posted March 20, 2015 Share Posted March 20, 2015 ;D ;D ;D ;D ;D You are correct Luke....My bad...I should have known better Link to comment Share on other sites More sharing options...
FCharlie Posted March 21, 2015 Share Posted March 21, 2015 http://blog.searsholdings.com/shc-updates/response-to-wall-street-journal/ Thankfully, SHC has an abundance of valuable assets in its portfolio, and we have proven time and time again that we have numerous levers at our disposal to generate substantial liquidity should we choose to do so. Hey, Eddie & Rob... Don't you ever get sick of talking about how you have the ability to generate "substantial liquidity"? Imagine how much liquidity you could have if you were profitable! Link to comment Share on other sites More sharing options...
BargainValueHunter Posted March 21, 2015 Share Posted March 21, 2015 http://blog.searsholdings.com/shc-updates/response-to-wall-street-journal/ Thankfully, SHC has an abundance of valuable assets in its portfolio, and we have proven time and time again that we have numerous levers at our disposal to generate substantial liquidity should we choose to do so. Hey, Eddie & Rob... Don't you ever get sick of talking about how you have the ability to generate "substantial liquidity"? Imagine how much liquidity you could have if you were profitable! THANK YOU!! The bizarre thing that I've tried to understand for years now is if you are going to compete against Wal-Mart, Target, Amazon, Home Depot, etc. shouldn't your TOTAL focus be on improved same store sales, margins, brands, etc.? This focus on financial alchemy may work out in the end but Lampert & Co. should decide what kind of company Sears is once and for all. I always wonder what Buffett would have done with Sears Holdings if he were forced somehow to become the leader of the company in 2006. Link to comment Share on other sites More sharing options...
valueinvestor82 Posted March 22, 2015 Share Posted March 22, 2015 Has anyone attempted to come Up with a range of values for the REIT expected June 1? I know more information will be available beforehand, but I'm curious. I think they're timing is good given the high valuation placed on mall REITs right now. I owned GGP from $.55 onward, which gave me some experience learning about FFO and cap rates, and of course, paid me handsomely for the experience... I'm a 3x holder of Sears over the last 4 years, selling successfully on the huge spikes that ultimately always occur with the stock. I'm in most recently in the low $30s after selling at $45 last time around. Link to comment Share on other sites More sharing options...
tng Posted March 22, 2015 Share Posted March 22, 2015 http://blog.searsholdings.com/shc-updates/response-to-wall-street-journal/ Thankfully, SHC has an abundance of valuable assets in its portfolio, and we have proven time and time again that we have numerous levers at our disposal to generate substantial liquidity should we choose to do so. Hey, Eddie & Rob... Don't you ever get sick of talking about how you have the ability to generate "substantial liquidity"? Imagine how much liquidity you could have if you were profitable! THANK YOU!! The bizarre thing that I've tried to understand for years now is if you are going to compete against Wal-Mart, Target, Amazon, Home Depot, etc. shouldn't your TOTAL focus be on improved same store sales, margins, brands, etc.? This focus on financial alchemy may work out in the end but Lampert & Co. should decide what kind of company Sears is once and for all. I always wonder what Buffett would have done with Sears Holdings if he were forced somehow to become the leader of the company in 2006. This is one of those things where we would never know for sure. Let's say if Lampert decided to go "all in" on the retail side and borrowed a lot of money to make a big push in marketing to try to make Sears relevant again. It could have been a major flop and Sears would run into liquidity issues in 2008-2009 and would have had to unload assets at unfavorable prices. Or maybe it would have worked and Sears would be a decent retailer today. Retail has tripped up some of the smartest people in the world, people like Buffett or Ackman. It's just really hard. Link to comment Share on other sites More sharing options...
constructive Posted March 22, 2015 Share Posted March 22, 2015 Has anyone attempted to come Up with a range of values for the REIT expected June 1? I know more information will be available beforehand, but I'm curious. I think they're timing is good given the high valuation placed on mall REITs right now. I owned GGP from $.55 onward, which gave me some experience learning about FFO and cap rates, and of course, paid me handsomely for the experience... I'm a 3x holder of Sears over the last 4 years, selling successfully on the huge spikes that ultimately always occur with the stock. I'm in most recently in the low $30s after selling at $45 last time around. What cap rate would you pay for a REIT with a dominant junk grade tenant? If there are any comparables for that condition, I don't think they are found in the mall REIT sector. Link to comment Share on other sites More sharing options...
BTShine Posted March 23, 2015 Share Posted March 23, 2015 Has anyone attempted to come Up with a range of values for the REIT expected June 1? I know more information will be available beforehand, but I'm curious. I think they're timing is good given the high valuation placed on mall REITs right now. I owned GGP from $.55 onward, which gave me some experience learning about FFO and cap rates, and of course, paid me handsomely for the experience... I'm a 3x holder of Sears over the last 4 years, selling successfully on the huge spikes that ultimately always occur with the stock. I'm in most recently in the low $30s after selling at $45 last time around. What cap rate would you pay for a REIT with a dominant junk grade tenant? If there are any comparables for that condition, I don't think they are found in the mall REIT sector. Great question. It would likely be a higher than market cap rate, but the current sub market leases could be re-tenanted at much higher rates. The initial NOI wil likely be depressed from market at first. All in, it's hard to say. Could we say that in its first 7 years most re-tenanting and redevelopment could be accomplished? Is that too optimistic? We are probably looking at 25 million square feet of existing space. If in 7 years you still have a net 25 million square feet that you're leasing at an average of $8 sq ft, then NOI is approx $200 million per year. Link to comment Share on other sites More sharing options...
Matson125 Posted March 26, 2015 Share Posted March 26, 2015 New Version of Sears Holdings Corporation Case Study Fairholme Capital Management http://www.fairholmeonsears.com/ Link to comment Share on other sites More sharing options...
Picasso Posted March 26, 2015 Share Posted March 26, 2015 Why did Fairholme include the value of Sears Mexico and Canada? Those are no longer part of Sears Holding? Link to comment Share on other sites More sharing options...
adesigar Posted March 26, 2015 Share Posted March 26, 2015 Why did Fairholme include the value of Sears Mexico and Canada? Those are no longer part of Sears Holding? We still own 12% of Sears Canada. Not all shares were included in the rights offering. Edit PS: I am not sure but Sears Holdings has a minority stake in Sears Mexico. Link to comment Share on other sites More sharing options...
peridotcapital Posted March 26, 2015 Share Posted March 26, 2015 New Version of Sears Holdings Corporation Case Study Fairholme Capital Management http://www.fairholmeonsears.com/ In our opinion, the core brands (Kenmore, Craftsman, Diehard), Home Services and Protection Agreements, Sears Auto Centers, Sears Mexico, Sears Canada, and other assets effectively net out the debt and pension liabilities. I would love to see how he arrives at a $6 billion valuation for the non-real estate assets. Hard to fathom. What is really amazing though is that he feels the need to talk up this position like this. His clients must really be pushing back after holding this losing investment for so many years. No other reason to be acting like Ackman with these presentations. Link to comment Share on other sites More sharing options...
Luke 532 Posted March 27, 2015 Share Posted March 27, 2015 Sears Shifts From Loss Prevention to Asset and Profit Protection http://lpportal.com/solution-providers/retail-news/item/3617-sears-shifts-from-loss-prevention-to-asset-and-profit-protection.html Link to comment Share on other sites More sharing options...
tripleoptician Posted April 1, 2015 Share Posted April 1, 2015 http://www.prnewswire.com/news-releases/sears-holdings-and-general-growth-properties-announce-5050-joint-venture-and-sale-leaseback-involving-12-sears-holdings-properties-located-at-ggp-malls-300059186.html JV with GGP as well as rights offering to Seritage. The real estate story continues.... Link to comment Share on other sites More sharing options...
ASTA Posted April 1, 2015 Share Posted April 1, 2015 biggest bullshit ever sold half my sears yesterday well still have 10% of my portfolio in SHLD :D Link to comment Share on other sites More sharing options...
rogermunibond Posted April 1, 2015 Share Posted April 1, 2015 Looks like Slim owns 100% of Grupo Carso that owns/operates Sears Mexico. http://www.bloomberg.com/news/articles/2014-09-25/carlos-slim-mimics-zara-to-spruce-up-sears-in-mexico Link to comment Share on other sites More sharing options...
adesigar Posted April 1, 2015 Share Posted April 1, 2015 Looks like Slim owns 100% of Grupo Carso that owns/operates Sears Mexico. http://www.bloomberg.com/news/articles/2014-09-25/carlos-slim-mimics-zara-to-spruce-up-sears-in-mexico Heres the only line from the Sears Holdings Annual report that mentions Sears Mexico During 2013 and 2012, the investment income from equity investments included gains of $163 million and $25 million, respectively, related sales of real estate joint ventures held by Sears Canada. Other investment income also included a $6 million, $6 million and $30 million dividend received on our cost method investment in Sears Mexico for 2014, 2013 and 2012, respectively. Link to comment Share on other sites More sharing options...
rogermunibond Posted April 1, 2015 Share Posted April 1, 2015 From the Grupo Sanborns IPO prospectus. So it looks like 85% of Sears Mexico is Grupo Sanborns/Carso and 15% to SHLD Sears Operadora México, S.A. de C.V. o “Sears México” se fundó en 1945, pero no fue sino hasta abril de 1997, cuando Grupo Carso adquirió de Sears Roebuck una participación accionaria del 60.0% en Sears México, y en agosto del mismo año, se adquirió una participación adicional del 24.9% a través de una oferta pública de compra de acciones; con lo que la participación de Grupo Sanborns asciende al 84.94% al cierre de septiembre de 2012. Link to comment Share on other sites More sharing options...
peridotcapital Posted April 1, 2015 Share Posted April 1, 2015 http://www.prnewswire.com/news-releases/sears-holdings-and-general-growth-properties-announce-5050-joint-venture-and-sale-leaseback-involving-12-sears-holdings-properties-located-at-ggp-malls-300059186.html JV with GGP as well as rights offering to Seritage. The real estate story continues.... The terms seem very realistic to me. The fair market value appraisal comes out to $60/sf. Given where diversified retail REIT comps trade, coupled with the overall condition of the SHC portfolio and the fact that SHC will be the tenant in 93% of the space, it seems like a reasonable discount to assign to the properties. Obviously over time as SHC's % declines, the valuation will move up towards other public REITs. Who knows where it will trade initially, but with a $2.5B purchase price, there is a good benchmark in place. A couple other tidbits after my initial skimming of the document: 1) Lots of good properties included, but not every crown jewel. For instance, South Coast Plaza is excluded. Also, a fair number of lesser properties, as 1/3 of the stores are Kmarts. I suspect they purposely created a good balance of properties so SHC could do this again when they need to raise a nice chunk of money in the future. 2) The gross and net book values of the properties are $2.4B and $1.5B, respectively. I took note of this because it allows one to back in to an estimated fair market value for the entire SHC real estate portfolio, which on 1/31/15 had a gross/net book value of $8.31B and $4.45B. This implies total RE value of $7.2B to $8.7B, so about $5.5B leftover at SHC post-deal. I am not going to venture a guess as to what E/V Seritage trades for initially (learned my lesson after underestimating the price of LE), but I am very interested to see what happens. I don't think a discount to the $2.5B is likely, so then it becomes a question of how much credit the market gives Seritage for future rent growth, which is inevitable but pretty far into the future at least in a material way. I would be a buyer at the right price, so I am hopeful that the market does not give the portfolio a big premium over the purchase price. Maybe the fact that everyone who wants to own it already will have their shares can make that hope a reality. Not sure who the marginal buyer would be post-closing, but the current owners could very well add to their stakes pretty substantially. Link to comment Share on other sites More sharing options...
InvestingOnSale Posted April 1, 2015 Share Posted April 1, 2015 http://www.prnewswire.com/news-releases/sears-holdings-and-general-growth-properties-announce-5050-joint-venture-and-sale-leaseback-involving-12-sears-holdings-properties-located-at-ggp-malls-300059186.html JV with GGP as well as rights offering to Seritage. The real estate story continues.... The terms seem very realistic to me. The fair market value appraisal comes out to $60/sf. Given where diversified retail REIT comps trade, coupled with the overall condition of the SHC portfolio and the fact that SHC will be the tenant in 93% of the space, it seems like a reasonable discount to assign to the properties. Obviously over time as SHC's % declines, the valuation will move up towards other public REITs. Who knows where it will trade initially, but with a $2.5B purchase price, there is a good benchmark in place. A couple other tidbits after my initial skimming of the document: 1) Lots of good properties included, but not every crown jewel. For instance, South Coast Plaza is excluded. Also, a fair number of lesser properties, as 1/3 of the stores are Kmarts. I suspect they purposely created a good balance of properties so SHC could do this again when they need to raise a nice chunk of money in the future. 2) The gross and net book values of the properties are $2.4B and $1.5B, respectively. I took note of this because it allows one to back in to an estimated fair market value for the entire SHC real estate portfolio, which on 1/31/15 had a gross/net book value of $8.31B and $4.45B. This implies total RE value of $7.2B to $8.7B, so about $5.5B leftover at SHC post-deal. I am not going to venture a guess as to what E/V Seritage trades for initially (learned my lesson after underestimating the price of LE), but I am very interested to see what happens. I don't think a discount to the $2.5B is likely, so then it becomes a question of how much credit the market gives Seritage for future rent growth, which is inevitable but pretty far into the future at least in a material way. I would be a buyer at the right price, so I am hopeful that the market does not give the portfolio a big premium over the purchase price. Maybe the fact that everyone who wants to own it already will have their shares can make that hope a reality. Not sure who the marginal buyer would be post-closing, but the current owners could very well add to their stakes pretty substantially. The estimate in #2 is very useful. The risk I could see there is that even a small excess of A-grade properties in the REIT could inflate its valuation. Conversely, a relative deficit of A-grade properties in the REIT should mean that the value of SHC's remaining portfolio is greater than this analysis implies. It would be interesting to see an analysis that compares the grades of properties in the REIT with those of SHC's remaining portfolio. Link to comment Share on other sites More sharing options...
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