Sunday, August 27, 2006
A Lesson Learned in Red
About a week ago, I alerted the readers of this blog that I was buying 2,000 CHS @ $25.70, because I thought it was "cheap." The problem with my analysis was that I did not take into account upper management at Chico's were (and still are) complete fucking morons-- unable to run a popsicle stand, let alone a major clothing franchise for chicks with money.
Prior to Chico's castration last week, knifing to the $17's, officially "Urban Outfitted," I was shopping at my local mall and stopped by one of their stores. To my surprise, it was completely empty. The store looked nice, the employees were cordial, the merchandise was high-end, but the foot traffic was dead.
Now it is clear to me.
Chico's will continue to suck wind, because the consumer is DEAD. There I said it.
The people who shop at Chico's (chicks with money) are loyal. The only reason for them not to go out shopping is because their husband's have confiscated their debit cards or they are slowing down their insane shopping spree's-- in order to save a little money for a later date.
Bottom line: The economy is slowing and people know it. I will be staying far away from any retailer for quite some time.
The percentage loss in Chico's will represent the largest loss in years for me. However, I will learn from it and try my hardest to make sure it doesn't happen again. That's all I can do-- after such a disaster. Sell and move on.
NOTE: It appears Hurricane Ernesto has been downgraded to a Tropical Storm. My early guess is for a sell off in energy related stocks and commodities. However, Ernesto can easily regain its Hurricane status and blow the tops off the rigs in the GOM. If so, I will be a big buyer of NGAS, NGS, GLBL and BEXP.
Prior to Chico's castration last week, knifing to the $17's, officially "Urban Outfitted," I was shopping at my local mall and stopped by one of their stores. To my surprise, it was completely empty. The store looked nice, the employees were cordial, the merchandise was high-end, but the foot traffic was dead.
Now it is clear to me.
Chico's will continue to suck wind, because the consumer is DEAD. There I said it.
The people who shop at Chico's (chicks with money) are loyal. The only reason for them not to go out shopping is because their husband's have confiscated their debit cards or they are slowing down their insane shopping spree's-- in order to save a little money for a later date.
Bottom line: The economy is slowing and people know it. I will be staying far away from any retailer for quite some time.
The percentage loss in Chico's will represent the largest loss in years for me. However, I will learn from it and try my hardest to make sure it doesn't happen again. That's all I can do-- after such a disaster. Sell and move on.
NOTE: It appears Hurricane Ernesto has been downgraded to a Tropical Storm. My early guess is for a sell off in energy related stocks and commodities. However, Ernesto can easily regain its Hurricane status and blow the tops off the rigs in the GOM. If so, I will be a big buyer of NGAS, NGS, GLBL and BEXP.
Comments:
<< Home
you are a pised off loser..why didn.t you go to the store before you lost your endowment.....
# posted by 
: 9:31 PM
: 9:31 PM
Don't sweat it. At least you admit your mistakes, I know a few bloggers that would rather blame it on say "hedge fund manipulations"
# posted by : 11:34 PM
: 11:34 PM
"you are a pised off loser..why didn.t you go to the store before you lost your endowment....."
Not a loser.
I lost a small amount in CHS-- it won't put me out of business-- considering I am still up 21% YTD.
I just wanted to express disappointment in myself for not reading the tea leaves correctly.
Not a loser.
I lost a small amount in CHS-- it won't put me out of business-- considering I am still up 21% YTD.
I just wanted to express disappointment in myself for not reading the tea leaves correctly.
I agree with your analysis but at the same time a shot to Chico's should bring shoppers to WMT, PSS, and DRBN. And contrarily CWTR has been catching bids for the last week or so. The previously mentioned three stocks all look to be rounding at a bottom(?) so maybe low end retail is not dead - folks have to shop somewhere. I was in Wally world and Target this past weekend and they were packed with back to school shoppers. Maybe a unique event but I don't think so because I also went to Dicks Sporting Goods and it was packed too.
Anyway - bad beats happen as we well know and I wouldn't even give the time of day to an asshole who posts as "anonymous".
Have a good day.
Anyway - bad beats happen as we well know and I wouldn't even give the time of day to an asshole who posts as "anonymous".
Have a good day.
CHS defense.
What has happened to Chico's has happened to almost every retail publicly traded company. During its initial growth phase, its flagship Chico's, then largely unnoticed kept opening stores like clockword. The store gained popularity, which resulted in strong same store sale comps (BTW, if new store openings is strong, the Street worries little about comps). Then management makes are remarkable coup and buys Glen Burnie based White House/Black Market. Great becasue this niche has some 95 store of which 70 were within a blocks from a Chico's. Great distribution.
What happened next, in hind sight, should not be a surprise. Chico's devotes energy to Soma, which its growth is getting lost in the maturing Chico's line -- law of large numbers. Agreed, coupled with a more conservative consumer, Chico's go waxed.
But look at the forward P/E and chart when the stock was at $50. The stock was totally overvalued relative to its peers and the stock was overly extended.
Next up... Coach.
Ooh-rah!
IJH
Post a Comment
What has happened to Chico's has happened to almost every retail publicly traded company. During its initial growth phase, its flagship Chico's, then largely unnoticed kept opening stores like clockword. The store gained popularity, which resulted in strong same store sale comps (BTW, if new store openings is strong, the Street worries little about comps). Then management makes are remarkable coup and buys Glen Burnie based White House/Black Market. Great becasue this niche has some 95 store of which 70 were within a blocks from a Chico's. Great distribution.
What happened next, in hind sight, should not be a surprise. Chico's devotes energy to Soma, which its growth is getting lost in the maturing Chico's line -- law of large numbers. Agreed, coupled with a more conservative consumer, Chico's go waxed.
But look at the forward P/E and chart when the stock was at $50. The stock was totally overvalued relative to its peers and the stock was overly extended.
Next up... Coach.
Ooh-rah!
IJH
# posted by : 12:53 AM
: 12:53 AM << Home
