Research . . . Original Message Mar 16, 2009 1:52 pm
Hi,
I'd like to start researching financials and annual reports regarding some of the more significant vacuum makers -- both corporate and private. Surely there's a way for private individuals to do this but I need some advice and ideas as to how to go about it without the process becoming expensive.
WRT economic times of the current recession and big box retailers, TARGET is left with a huge bull's eye on its back according to Bill Ackman who says TARGET isn't measuring up to Wal*Mart's financial results [the new standard for the retail industry? ].
One of Wall Street's most high-profile investors is focusing his firepower on Target Corp., whose flailing performance in the recession has left it with a big bull's eye on its back.
Bloomberg News
BillAckman has been prodding Target to change strategy for years.
Hedge-fund mogul Bill Ackman has called a meeting in Manhattan Monday to introduce his slate of five dissident directors -- including himself -- that he is asking shareholders to elect May 28.
Mr. Ackman says his candidates will bring new ideas to the discount retailer and relevant expertise to a board he describes as slow to make critical decisions. "We're not talking about revolution, but evolution," he said in an interview. "We think we can make the company better."
Not long ago, the challenge would have drawn little interest; Minneapolis-based Target was a darling of investors, out-selling rivals such as Wal-Mart Stores Inc., which struggled to copy Target's cheap-chic clothing and eye-catching ads.
A 58% plunge in Target's stock from September to March might make it easier for Mr. Ackman and his Pershing Square Capital Management to grab the attention of unhappy shareholders eager for change. Despite a recent rebound that has lifted the stock of most retailers, Target shares remain down more than 39% from their peak of about $70 in July 2007.
One weapon Mr. Ackman is deploying in the proxy battle is Wal-Mart, which has managed to post relatively robust growth despite the recession.
In past downturns, Target's sales gains have trailed Wal-Mart by a percentage point or two, but since autumn that spread has widened to up to six percentage points. Some retail analysts have pointed out that Target's business began to slow before the recession, evidence that, among other things, some competitors that copied its low-priced designer strategy might be stealing its thunder.
"Since the fourth quarter of 2007, Wal-Mart has outperformed Target on key operating metrics, including growth in retail revenues, same-store sales, and earnings per share," Mr. Ackman wrote in a May 1 letter to Target shareholders promoting his board slate. On Thursday, Wal-Mart announced its U.S. discount-store sales in April shot up by 5.9%, while Target reported an anemic 0.3% rise.
Mr. Ackman has had some success in previous board battles. In 2006, he helped convince Wendy's International Inc. to sell off its Tim Horton's doughnut and coffee chain. In 2007 he tried to oust the entire board of Ceridian Corp., a payroll company, and replace it with an alternative slate. Pershing Square agreed to a compromise that gave it four seats on the board; Ceridian later was sold to buyout firm Thomas H. Lee Partners and insurer Fidelity National Financial Inc.
Target is taking Mr. Ackman's proxy battle seriously. It has slammed him in a flurry of news releases and letters to shareholders, and defended its board, which includes former executives of General Mills Inc., Quaker Oats Co. and the current chair of Wells Fargo & Co., as having all the right experience to guide the company.
Reuters
Target's business began to slow before the recession, indicating that some competitors were beginning to steal its thunder, some analysts say.
Target Chief Executive Gregg Steinhafel contends Mr. Ackman's bid for board seats is a ploy for short-term stock gains. The activist's proxy fight in Target, he wrote in a May 6 letter to shareholders, "is not aligned with our other shareholders."
Standard & Poor's Ratings Services recently described the battle, which Target figures will cost it more than $11 million, as "a distraction" for the retailer's management and board.
Mr. Steinhafel argues a turnaround is already under way. Target is expanding its grocery offerings to more stores, and retooling its advertising campaign to emphasize low prices. "Getting better at what we do is our No. 1 priority," Mr. Steinhafel said in an interview.
The Target strategy seems to be too little, too late to satisfy Mr. Ackman. He dedicated one of his hedge funds to Target's stock, and lost $1.6 billion of investors' money, forcing him in February to apologize for the fund's "dreadful" performance over the previous two years. Today, according to his proxy material, his funds own about 3.3% of the company's 752.3 million shares outstanding, and call options on an additional 4.5%.
After two years of prodding Target to change its business strategy, Mr. Ackman in March launched his proxy battle. His nominees include Jim Donald, former chief executive of Starbucks Corp. and a longtime supermarket executive; Richard Vague, who has run major credit-card firms; Michael Ashner, chairman of Winthrop Realty Trust, and Ronald Gilson, an expert in corporate governance who teaches at the law schools of Stanford University and Columbia University.
Last year, Mr. Ackman successfully pushed Target management to sell a stake in its credit-card portfolio, and he's still insisting it unload the rest. Target has signaled it is willing to do so when the time is right. But he wasn't able to convince Target management to spin off land it owns under its stores to create a publicly traded real-estate investment trust. Target deemed the move too costly, and said it could undermine the company's credit ratings.
How investors will respond to Mr. Ackman's proxy challenge remains to be seen. The two major firms that advise institutional investors on proxy votes, Risk Metrics Group and Proxy Governance Inc., said they will issue recommendations later this week.
But some shareholders are receptive. Wayne Kozun, manager of the Ontario Teachers' Pension Plan, which has assets of $85 billion (Canadian) and a small holding in Target, says he thinks Mr. Ackman's board candidates have a shot at succeeding.
"I just think it is good to see shareholders have more choice," said Mr. Kozun, who added that his fund has not yet decided how it will vote.
Corrections & Amplifications: One of Bill Ackman's nominees to the Target board is Richard Vague, who has run major credit-card firms. He was incorrectly called Richard Vargas in the original version of this article.
This message was modified May 12, 2009 by CarmineD
You're welcome Venson. TARGET stores has embarked on a huge expansion effort here in Las Vegas with new stores scheduled to open almost each year into the near future, including he one here just recently in North Las vegas.
But , surely it is a sign of the times, that some big box retailers which can't cut mustard [Circuit City; Linens-n-Things] will go away and others will get taken over either operationally and/or with changes in management [like TARGET with Bill Ackman and his band of hand picked Board members].
Most reports for 2008 are showing that appliance sales across the board were down about 12 percent in unit sales. That would jibe approximately with my suspicion that new vacuum sales were probably off 10 percent [in unit sales]. At 20 MILLION new full sized vacuums sold per year that would mean about 18 MILLION. Not too shabby in numbers but of course the devil is in the details. What were the revenue and profit from the sales? I suspect both wholesale and retail vacuum prices suffered along with the unit sales decline.
Some interesting facts and changes concerning retailers compiled adn released for calendar year 2008 in billions $ by Wash DC based trade group Stores Magazine in concert with London based market researchers Planet Retailer. Based on 2008 revenue. Enjoy the reading. BTW, as you may know Wal*Mart recently threw its support behind the Obama Administration's Health Care Proposal that ALL employers provide employee health care benefits and plans. After the W*M news made the headlines of the Wall Street Journal, the President announced a hasty news Conference to unveil his health plan.
Carmine D.
Department stores lose ground on annual retailers' list
Wal-Mart keeps commanding lead; Home Depot slips while Costco, Best Buy advance
By Sandra M. Jones |TRIBUNE NEWSPAPERS
July 2, 2009
For a glimpse at how the retail landscape has changed since this recession began in December 2007, look no further than the annual list of the nation's largest retailers.
Department stores are shrinking. Discount chains are growing. And Wal-Mart Stores Inc., the long-standing top seed, is so far ahead of its peers that the second through seventh largest retail chains combined would still generate less annual revenue than the $405.6 billion rung up at the world's largest retailer last year.
"The economy hasn't been a losing proposition for everyone," said Susan Reda, executive editor of Stores magazine, an arm of the National Retail Federation and publisher of the annual list. "And retailers who have made it through the recession will be well-positioned to grow in the future."
The Washington, D.C.-based trade group on Wednesday released its annual list of biggest U.S. retailers. The ranking, compiled by London-based market researcher Planet Retail, is based on 2008 revenue.
Among the biggest changes from the 2007 ranking: Home Depot dropped two notches from its No. 2 spot, where it remained for much of the housing boom, as many homeowners strapped by the economic downturn put off remodeling projects and others battled with banks over mortgages to stay in their homes.
Electronics giant Best Buy Co. appeared on the top 10 for the first time, after a steady climb from No. 16 in 2000, unseating Supervalu Inc., owner of Jewel-Osco and Albertsons grocery stores, which dropped to No. 11.
Sears Holdings Corp., parent of Sears and Kmart stores, clung to the top 10, falling to ninth. The retailer has been steadily losing ground for more than a decade, according to the list. In 1992, the two stores held the second and third spots on the list and together generated more annual revenue than No. 1 Wal-Mart, according to the trade group's data. As recently as 2000, Sears ranked fourth and Kmart fifth.
Meanwhile, Lowe's rose a notch to No. 8, a big step up from its No. 14 spot in 2000. The home improvement retailer took advantage of Home Depot's misstep of cutting back staff. Home Depot's move, under former CEO Robert Nardelli, hurt customer service. Nardelli came under fire at Home Depot for his oversized pay package and management style.
Lowe's positioned itself as a cleaner, friendlier alternative to Home Depot, and that strategy helped Lowe's hold its own during the economic downturn, said Paula Rosenblum, managing partner of RSR Research, a Miami-based retail consulting firm. Still, she predicts Home Depot, which is in the midst of a turnaround under Chief Executive Frank Blake, is angling for a comeback.
"Lowe's was hitting the right note during the boom," Rosenblum said. "The question is, in the coming couple of years with so many foreclosures, it implies there is a lot of remodeling to be done. It will be interesting to see how it will play out. It's going to be a two-horse race."
Another consistent climber is Costco. The warehouse club known for upscale merchandise has overtaken Target as a place to find cool stuff on the cheap. Costco rose two notches to the No. 3 spot, behind Kroger. Target, for its part, regained its No. 5 spot, after dropping to sixth in 2007. In comparison, Costco ranked No. 9 behind Target at No. 7 in 2000.
Retail consultant Burt Flickinger III points out a common factor among the retailers climbing the ranks: managers who grew up within the company and know it inside and out.
"They all have continuity of management," said Flickinger, managing director of New York-based Strategic Resource Group. "These are people who are born and raised in the company instead of executives who are more focused on taking care of themselves than taking care of their team or their consumers.
This Peter Huber article appears in the August 24 edition of Forbes magazine. Enjoy. Takes innovation to a whole new level.
Carmine D.
Companies & Strategies
My Tax-Free Roomba
Peter Huber, 08.05.09, 06:00 PM EDT Forbes Magazine dated August 24, 2009
I see a jobless recovery every time one of my three iRobots cruises around the floors of my home. The Roomba vacuums most of the house. The Dirt Dog does the heavy lifting in the basement, garage and den. The Scooba scrubs the kitchen floor. What I want next is a mini-Scooba that gets into the tightest corners of bathrooms. Then a stair climber, a window-cleaning crawler and a hockey-puck-size scrubber of counters and sinks.
Robots are smart, tireless and effective--and over the last two years they've cut our spending on household help by 80%. My thanks to the Pentagon for helping fund development of the technology for bomb disposal and such.
In all the economic gloom many people seem to have forgotten that we live in the most extraordinarily fecund technological age in history. This ought to be a terrific time for investors. Deploying labor-saving technology requires a lot of new capital but offers big productivity payoffs to businesses that buy the right stuff. Low-skill workers, on the other hand, have much reason to stay gloomy.
People pushing vacuums and mops aren't going to keep getting smarter, cheaper, faster and more reliable, but iRobots certainly are. Mass production is slashing the cost and boosting the capabilities of high-power semiconductors and motors that control the flow of power to the wheels of hybrid cars. The electric drivetrains get their intelligence from digital microprocessors, which improve even faster. Incorporated into big robots rather than cars, these same technologies can assemble the cars themselves or anything else that's built on an assembly line. The management of robots is being automated, too, using increasingly powerful software and networks that link them horizontally across factory floors, and vertically through supply chains, which span raw materials sources to retailers.
Employment in the service sector of the economy is also vulnerable to competition from intelligent machines. Car mechanics connect a computer on the shop floor to the one under the hood and then do as the machines direct. And the mechanics fix a lot less than they used to, because friction, wear and factory defects plummet when robots machine the parts and assemble the cars. McDonald's ( MCD - news - people ) has already automated much of what it takes to move the calories from the farm to the drive-through window and will inevitably automate almost all the burger flipping and bag filling, too. Secretarial help largely disappeared from many professional lives years ago. Travel agents, sales clerks and cashiers are slipping out of lives that view shopping as a chore, not a social activity. Digital technologies are fast displacing the printers, distributors and retailers that stand between readers and publishers.
Higher-skilled service providers are next in line. Many of the hours billed by accountants melt out of my life as wired networks knit together my electronic paychecks, financial accounts and tax returns. I've hired hundreds of bright young researchers over the course of my professional life; today I get answers from Google ( GOOG - news - people ) in far less time than it would take to explain most of my questions to a live assistant. WolframAlpha, the "computational knowledge engine" for retrieving and crunching numbers and solving equations, could well emerge as the Google of the quantitative world.
Much of the time Washington seems determined to help kick the marginally competitive labor off the edge even faster. The prospect of new payroll taxes will certainly accelerate automation--I don't pay Social Security or health care taxes on my Roomba. Machines don't join unions and don't hire lawyers to pursue far-fetched claims of discrimination or job-related injuries. For shareholders and lenders, companies that invest in machines have become much safer bets than companies that invest in people. Machines don't use political muscle to seize the company's assets when businesses get into trouble.
Washington can undoubtedly find ways to suppress investment in the machines, too. Environmental edicts that jack up the price of energy--electricity especially--will suppress investment in chip fabs, Web server farms and all other energy-intensive industries. Tax laws are easily jiggered to discourage capital purchases and prop up uneconomic employment. But that kind of employment will have to be subsidized by the economic kind--which can instead flee to India or China. Washington's choice now is between a jobless recovery and no U.S. recovery at all.
Peter Huber is a senior fellow of the Manhattan Institute and coauthor of The Bottomless Well (Basic Books, January 2005).
This message was modified Aug 11, 2009 by CarmineD
Thanks Carmine. This article is both totally cool and totally frightening.
For now at least, a good housekeeper with skills and situated in the right position can command a gross of $1,000 or more per week. An enviable income even to some college grads these days I think. Robots can't scamble an egg yet, choose a rib roast at the market or walk a kid across the street. Maybe for that area there's still a little time.
Nonetheless, the Roomba robots have improved and will improve over time. You'll note that there was no nitpickling on the author's part about deep cleaning, cyclonics, high air-filtration or weight. The issue was about getting into corners.
The real "plus point" is that you can go out and buy a device to roam your floors and never have have to do it yourself or pay someone to do it for you and thus be obligated with filing tax info or paying insurance premiums.
Yet the bigger picture did get me to thinking. We all can't be born Einstein so what's to be done in future for those or ourselves who are not if we mechanize to the point there's little need simple labor by all those who don't make it to the top.
I have a good friend who has twin sons and a younger boy. One of the twins, really a great kid now entering into his teens, has been extremely depressed as he has some learning disabilities and feels that he's "dumb." Of course all -- mother, father, friends, counselors -- are trying to help him through and impress upon him that he is not any less than anyone else, that he only processes information in a different way than some others. The subject of this young man came up the other day as my friend and I were talking and my immediate response was, "Well, not to worry, he can work with his hands. Lots of people do." You've shown me how wrong I may be.
Another question just raised the other day came up as another friend of mine and I were discussing the "cash-for-clunkers" thing. Per my friend, hypothetically, the rebates may help keep the auto industry afloat and save jobs or maybe even open up new jobs. I'd forgotten about the robots in use in the auto industry. They weld, they paint and do all manner of tasks priorly handle by human workers in a very precise and less expensive fashion and with little need of human hands save for programming and repair. I now have to call this guy back and ask him what exactly is to be saved.
Re: Research . . . Reply #24 Aug 11, 2009 11:47 am
Venson wrote:
Another question just raised the other day came up as another friend of mine and I were discussing the "cash-for-clunkers" thing. Per my friend, hypothetically, the rebates may help keep the auto industry afloat and save jobs or maybe even open up new jobs. I'd forgotten about the robots in use in the auto industry. They weld, they paint and do all manner of tasks priorly handle by human workers in a very precise and less expensive fashion and with little need of human hands save for programming and repair. I now have to call this guy back and ask him what exactly is to be saved.
I enjoyed the iRobot article and its nuances of meaning for the economy. I though you and others would too. I like the products and the product implications. I always have since their inception on the market/industry in October 2002. Like you I noticed the complete lack of nitty gritty mechanics about the clean up processes and procedures. Not even vacuums, technically. But they do their jobs at reasonable and affordable prices without alot of manual intervention by users.
Not to worry about your friend's son. God provides. Ask him to read the life of St. John Mary Vianney, the Cure de Ars. Almost flunked latin. Relegated to a small parish of 270 that is no bigger today than back in his day. The priests in the surrounding areas joined forces and signed a petition to the local ordinary to have St. John Mary Vianney removed from the parish. St. John Mary Vianney got wind of the petition and asked to be the first to sign it. He was a very humble man and accepted his position in life with great joy. Pope Benedict XVI has declared this year the year of the priests with St. John Mary Vianney as the patron saint. Another Saint in the making is Solanus Casey, home bred from Michigan, who suffered with a similar background as the Cure de Ars. Doing what we do daily with perfect love is what matters.
Carmine D.
This message was modified Aug 11, 2009 by CarmineD
![[bill ackman and target]](http://s.wsj.net/public/resources/images/MK-AW027_TARGET_D_20090510203451.jpg)
Bloomberg News ![[target wal-mart same-store sales ]](http://s.wsj.net/public/resources/images/MK-AW053_target_NS_20090510215231.gif)
![[target and ackman and board members]](http://s.wsj.net/public/resources/images/MK-AW028_TARGET_D_20090510210001.jpg)
Reuters 
