Verimark returning to the old shenanegans many suspected they were fully capable of. Posting a 6 month loss down to what can only be described as operational inefficiencies - inexcusable for a company who's business model depends so heavily on this. Companies reducing stock is surely an indication of products that are not selling. I for one am disappointed. The trick with Verimark, I think, is to watch them closely for when they introduce their next killer product. Previously it was the twister and the bauer pan. But those are old and outdated. This type of business needs a great product to make serious margin - so pay attention to those goofy folk in the t.v. adds guys and girls, because if they turn a sale on you, chances are they are doing it to the Jones' too, so you will want to get out there again and buy VMK shares
I wonder just what the effect of the new warehouse will have on operational efficiencies and when that will have and impact on earnings though. Also wrt to gearing and funding, how much comfort does anyone has that they are in a good position? I need to do more work on this one.
That would again be your opinion. Others might consider a company paying 12% dividend and with 2000 distribution outlets as a great strategic bet. Downside risk of continued losses - well you would have to be a complete monkey not to be able to make money with this sort of infrastructure. Upside? Well that is the point, a killer product in the next 2 years will see you quadrupling your investment
Thankfully I got over my addiction to this one and sold out my positions a few weeks back. The main issue is the earnings volatility and as I said in my last post on the topic, this is driven a lot by foreign supply exposure in my opinion. The exchange volatility has a massive impact on their results. Also when you pop into an emporium and spend 30 minutes there int he middle of a booming mall and not a single other customer walks in - well.....
Yip, that is pretty much the nature of their business, although I find it disconcerting that they cannot protect themselves from foreign exchange volatility (I mean haven't they heard of currency hedging or forward cover?). As for empty stores, that is how this business works, IMO. A friend of mine worked for a company trading hollywood merchandise. He mentioned that their business worked by bringing in 10 products so that 1 could make them money. His comment at the time was 'Who on earth could guess that a sponge wearing pants would become an international best seller?)'