Debenhams Share Discussion Threads

[simon templar qc] 13/1/2018 20:06

John Lewis warns over volatile economy and competition to increase...



John Lewis debt to climb and profits to fall as I predicted when they report in early March.

That would be the right time to assess the retail environment hopefully more retailers will have to update on trading or possibly end of April following Easter.

[simon templar qc] 13/1/2018 19:24

Market analysts were out on a number of retailers last week.

They got Marks right on sales fall however margins are held up because of less discounting. Tesco was supposed to be the market leader but beaten at the post by Morrisons. The analysts guessed Sainsburys to weaken they got them wrong. House of Fraser was looking bust and margins better than forecast.

Also Bealles saw a 4% sales rise, however they don't say what that is for as they opened a new store in Perth.

What is misleading that the press has picked upon is when a company mention like for like it can be a distortion as a store could have been improved since the last time round.

But was is also important as what has been announced, is what is expected to happen as the year progresses, and the concern is less money in consumers pocket and 4 out of 5 workers are concerned on that front.



Many retailers had a better day yesterday, following a bad day Thursday. Share prices do not fall in a straight line they bob about quite a lot. That said I see further downside here despite Fridays rise.

Its too early in the retail rout to gain a proper picture there will be more trouble ahead. The discounters are holding their own but even card factory has warned. Bensons and Harveys carrying on with large discounts. John Lewis stating the competition will get fiercer will simply reduce margins. Marks said they would not chase sales on reduced margins!, so their profit guidance unchanged. That said they are on more than double Debenhams margin.

As for House of Fraser it looks like they have a breathing space for the time being. While retailers manage to hang on all are out risk, some more than other.

edit:

City braced for retail collapse

[cascudi] 13/1/2018 17:44

according to shortracker there are 14% of the share issue that have been shorted. the average daily volume is 9m share per day .. that means that shorter will need about 18 days to cover they short... this is a very high number so the squeze should be quite big.. right?

[terminated] 13/1/2018 17:14

Snowflake comes to mind. He certainly has a lot of spare time on his hands I must say.

[wllmherk] 13/1/2018 00:51

Foxy is correct Simon, try the filter button, i filtered montyhedge over a year ago and never looked back. He has nothing of value to say.


As for DEB they need to reduce debt and a cut to the dividend seems nailed on to me. Store closures and investment in the website would be a start. Unfortunately, I can see some economic headwinds in the next few years impacting traditional bricks and mortar stores such as DEB.

wllm

[topazfrenzy] 12/1/2018 22:23

fox, I am green here and my position is small so not concerned.

[simon templar qc] 12/1/2018 18:31

Thanks foxy I will ignore in future, they will not drag me into the same gutter,

[1fox1] 12/1/2018 17:25

ST. Why are you giving these people the courtesy of a reply? They are the bitter one's for investing in a poorly run company that looks in serious danger of going t*ts up. Glad I took your advice. Other bitter people on this board should have done the same. You have called this spot on from circa 90p. Well done sir! Topaz hope you got out on todays little spike? 25p is a near certainty. I may risk a small wager 20p mark

[hpcg] 12/1/2018 17:12

kazoom - I understand what you are saying, and I would be late to the party if I thought there was value in the equity. With the debt pile and direction of travel in the business I think ultimately the equity value is minimal to zero. Don't forget that something which has fallen 90% can still fall another 90%, and yet another 90% after that. Some micro caps have fallen that amount many time over, which is how they end up with billion and billions of sub-penny shares. Most likely outcome is Mike Ashley buys the debt well below par and takes the company private, for nothing, through a pre-pack.

I don't think the ending is near though, but if they don't have either the money or supplier finance to stock up for next Christmas they are toast. Retail is unusual in that it needs increasingly negative working capital as it expands - shoppers pay immediately and suppliers in arrears. This is pretty grim in reverse.

I expect volatility in the share price, so traders can make money either way. I'll aim to slowly build my short position into strength, whilst keeping an eye on any signs there may be a turn around. HoF staying alive is v. bad for DEB.

[topazfrenzy] 12/1/2018 16:21

ps: if you'd been shorting all this time Simon then perhaps I'd have some respect for you but obviously you haven't but just got an axe to grind and that's about it, you must eat, breathe, dream retail Armageddon, GET HELP!

[montyhedge] 12/1/2018 16:19

Totally agree.

[tim 3] 12/1/2018 16:03

hpcqI agree with what you have said.The problem is if it continues some category areas will only be available online At present consumers have the best of both worlds they can see and compare items in a shop then buy online.Look at electricals if DC i.e. Currys pc world were to fail then other than at JL many people would no longer be able to see these products instore (and DC have only survived because they are competitive with the net but make profits flogging accessories)

[kazoom] 12/1/2018 14:31

Hpcg - I can't help thinking you are late to the party here.

No position at the moment, but with recent falls on trading that was not a massive surprise, I think the risk reward has shifted somewhat. I doubt you're at too much risk of a sudden uplift, but short of a (possible) further disaster, I think your reward we be quite limited too.
IMHO

[simon templar qc] 12/1/2018 13:18

I also think it sad to see empty shops on my high st which used to be the third most prominent High St in the UK and its getting filled with cheap shops and charity shops.

Its not my fault people aren't buying expensive clothes they once did neither have the surplus money to spend money on clothes like they did.

But these are part the reasons for the decline in the High Street and investors need to understand it.

As for spending every hour on this board I only look in to take a breather from other more important stuff. From 10.30 yesterday I made no comment before last evening.

[simon templar qc] 12/1/2018 13:07

monty,

Again you have to resort to personnel remarks, if you are not interested in Debenhams then why bother looking in just to make personal comments about any poster?

What I would like to see is some posters come up with information about any good reason to buy the stock. Any case for investing whether it be on the net asset value, or any economic reason.

As I said earlier I don't dislike bricks and mortar stores at all I like the look of a John Lewis, I like the personal service I don't like rails and rails of drab clothes cluttered in stores and it would appear the CEO doesn't like it either!

Unfortunately going forward the market is changing and companies have to adapt. If they don't do it quick enough they will fail.

[montyhedge] 12/1/2018 12:48

Simon
I have no position in Deb, no axe to grind, but you do seem obsessed with this share. Every hour seems a lot. If your short and made a fortune good luck.

[simon templar qc] 12/1/2018 12:21

TOPAFRENZY, MONTYEDGE, YOU BOTH NEED TO LOOK INTO A MIRROR AND ASK YOURSELVES WHY ARE YOU MAKING PERSONAL COMMENTS ABOUT POSTERS ON BULLETIN BOARDS.

HAVE EITHER OF YOU NOT HAD A GOOD EDUCATION?

THIS THREAD ISN'T A PERSONAL COLUMN IN A PAPER IT IS A DISCUSSION THREAD ON DEBENHAMS AS TO THE STATE OF THE COMPANY WHAT THE PRESS ARE SAYING AND WHETHER ITS WORTH AN INVESTMENT.

OR IS THERE ANOTHER REASON FOR PERSONAL COMMENTS ARE BOTH OF YOU ENVIOUS I HAVE CALLED THE SHARE PRICE DECLINE RIGHT?

AS A MATTER OF FACT I AM NOT BITTER AT ALL ABOUT THE RETAIL SECTOR I HAPPEN TO LIKE THE FEELY TOUCH OF CLOTHES BUT I AM A REASLIST I SEE TOO MANY RETAILERS ALL IN THE SAME PLACE ALL COMPETING AGAINST ONE ANOTHER.

I NEITHER WANT TO SEE PEOPLE LOSE THEIR JOBS WHEN STORES CLOSE BUT THAT IS EVOLUTION.

ONE BUSINES CLOSES ANOTHER OPENS UP THAT IS LIFE AND PEOPLE NEED TO UNDERSTAND THAT. WE DO NOT LIVE IN A FIXED WORLD THE WORLD IS FOREVER CHANGING.

[hpcg] 12/1/2018 12:10

For clarity, in case it wasn't obvious, I am short (via spreadbet, so not directly the stock). I can't see how DEB doesn't need either a refi, at cost to equity, or has to close. This won't happen tomorrow, but a couple of cash negative quarters will really heap on the pressure.