Sp up on the news.
Their online platform must be really good to maintain the level of sales they generated during the lockdown!
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Good announcement from HLG, certainly supports recent increase in SP, just regret not buying more when it was screaming value at me. Was too timid.
Agree a good result in the circumstances (albeit with substantial assistance from Govt's on both sides of the Tasman).
Going forward we will have massive unemployment, much higher minimum wages for staff, a significantly lower currency than average which will materially affect margins, stock that's left over from last season and a the risk of rising back to level 3 lockdown. On top of that a percentage of the public won't feel safe going back to malls for quite some time. On top of that, apparel purchases can easily be deferred.
I think there's sound reasons to remain very cautious with this one.
Disc: No position, and not intending to take one anytime soon.
Lockdown walks seen heaps of new faces out walking and enjoying the fresh air
And it seems many guys got the gear out they hadn’t worn for years and boy was there some sights
Now back to normality I take it that these walks now off the agenda and those clothes put away again
But maybe somebody will tell them to go the Hallensteins and buy a decent pair of shorts and a decent shirt.
I don't have a position in the stock either, Beagle.
But having met HLG's management and understand their strategy (basically, up to date fashion at affordable prices), I find it grating to read all the doom and gloom from those who have no idea whatsoever about HLG's strategy and about how good the management really is.
Corporate welfare is good
Well done Grant
Kathmandu today appeared to have more customers in the center place hamilton store than HLG. No woolen face masks yet for fashionable PPE. No one in the waikato seems to want to wear a mask much...
Many years in clothing manufacturing tells me if stock does not start moving quickly then massive non-profitable sales will begin to clear stock. Reports of China cutting wages by 10% - 50% may be the savoir of the clothing industry but misery for workers.
Comments from DOW overnight
"Wall Street closed in the green in a volatile session on Friday, as oil prices (+7%) extended gains to link their third weekly rise and offset a dismal US retail sales report. On Friday, a US Census Bureau report showed retail sales plunged by a record 16.4% in April (vs consensus of 12.3%), with clothing falling 78.8% and electronics 60.6%. On the policy side, the US House aims to pass a $3 trillion coronavirus relief package across four bills later today despite opposition from Senate Republicans and the White House."
Center place mall on friday was not empty, people were out and about but i certainly cant see HLG staying at current prices. Even KMD has pulled back. DISC: bought KMD at 72 sold at 1.10. KMD is back to post float prices and may trade in a range. July to late october will be interesting. Post GFC was a trading environment and i see this also as a 2 year trading phase especially if it takes time to manfacture a vacine. Remeber Inida does most manufacturing from product shipped from china for most generic drugs.. Traffic on the motor wasy south from hamilton started following in large numbers friday evening. It will be interesting to check the population moments this coming weekend.
price come off a bit lately probably due to the realisation and facts going by paymark talk. sales were not as good as expected for apparel when we went to level 2 .
would be no surprise apparel suffers during downturns , also car sales . a phonomenon in in countries
Australia retail down by 18%
https://www.abs.gov.au/ausstats/abs%...7?OpenDocument
From the article:
"Turnover was down 9.4 per cent when compared to April 2019."
That doesn't sound too bad at all. Once the recession and those job losses start kicking in, it will likely be a different story.
One would assume NZ's figures will be a lot uglier due to the imposed lockdown.
Broken down through 30 day MA now. Looks like from a TA perspective the bounce may have been overdone and may be over. Economic reality to bite as lots of unemployed people only buy consumers staples and get their clothes from somewhere cheaper like Kmart ?
Where do you think it will settle? There seem to be a few stocks that have just started to realign themselves with economic reality. Thinking ZEL, AIA, ANZ and this one to name a few. Is it a sign that the new "retail investors" are back in the office with work to do, or they've run out of powder, or some profit taking by the smart money? Or are people just getting real and we're seeing the beginnings of a correction back to an L shaped recovery?
Crikey there's some difficult questions in there. I think high end retail will really struggle, KMD is a very bad bet in my opinion. Does anyone really need a $400 jacket or other name brand item for the foreseeable future ? People will trade down in brands, google mountain warehouse. On the other hand basics and necessities will do just fine WHS should be perfectly okay.
Glassons Australia were doing really well before the lockdown and also Glassons N.Z. and Hallensteins were doing okay. This mid priced section of the apparel market is very difficult to read. Management have a very good reputation and an investment on the blind into HLG at this point without knowing the short term impact of Covid 19 is really a punt on management's ability to trade their way through this and get back to an acceptable level of profitability over time.
I like the company, the management and the mid priced position it occupies in the apparel sector. Their accounts are clean and easy to understand, there's no debt and no funny business with intangible assets or any other nonsense.
To value this however is incredibly hard. Some serious guesswork is involved. My sense is profitability will not recover to anywhere near previous level's until there's a vaccine and people feel really comfortable going to the mall again. On the other hand their online offer is very good but there remains in my mind fundamental uncertainty over how demand will shape up going forward.
There are clear demand, currency and cost headwinds, (significant increase in minimum wage from 1 April 2020 and again on 1 April 2021).
I got really interested when it broke back down under $2 in late March, (having sold out in the late $5's a little while earlier). I was too greedy and was looking for $1.50 so missed that opportunity.
Back in August 2016 there was fundamental uncertainty with a number of large overseas chains looking to open stores here. The shares were $2.70 then, the dividend yield was 15% gross inclusive of imputation credits and the forward PE was less than 10. That was great buying and I did in decent volume.
We're not there yet. I see more risk at present than what existed in late 2016, considerably more. I think the best thing is to simply let this one settle down and have a look again when there's a clear and sustained new uptrend. I'll use a break up through the 100 day MA as my main TA indicator. I think in the meantime reality bites and the recent jump up from a low of $1.80 in late March has been overdone.
Now we're well on the way to getting on top of this virus in N.Z. I'd be interested again in the mid - late $2 range and might take a punt there even without TA indicators around there as I like the management. If it doesn't get down there I will use the 100 day TA signal to tell me when to get back in.
My 2 cents worth.