HLG - Hallenstein Glasson

[bull....]

Most mall rents have 3 components. 1. A fixed monthly lease. 2. A percentage of gross sales. 3. A smaller percentage of gross sales that goes towards a marketing fund for the mall to promote itself in the media. In a shutdown situation neither 2 or 3 are payable and HLG will be working with Mall owners for rent relief / deferral for the fixed monthly lease. I am sure the Mall owners will have to take a pragmatic "we're all in this together approach" There is no point bankrupting almost everyone as they will end up with a ghost mall nobody wants to come back too. I don't think its as dire as you are suggesting but it certainly is a very serious situation which calls for a pragmatic approach by all stakeholders and some fast action on cost cutting.

nice breakdown , I see premier investments in aus saying if landlords dont reduce rents they will just close the stores

https://nz.finance.yahoo.com/news/le...6205--spt.html

mall traffic well down

Shopping mall giant Vicinity slashes profit forecast amid coronavirus crisis

https://www.smh.com.au/business/comp...19-p5427u.html

[Beagle]

Thanks for the links Bull...very interesting. (Coutts you'd better not click on them unless you want a really bad day).
I have noted KPG owner of many malls here very seriously under the pump lately. Unless malls take a pragmatic approach to rent relief they will shoot themselves in the foot and they will end up with a massive level of vacancies unlike anything experienced before.

[bull....]

briscoes just cancelled there dividend and no guidance given. hlg will be next in there update

[Beagle]

WHS will be next. Just announced a 10 cent divvy the other day. I can't see that being paid now. They'll do an "AIR"

[Flugenbear]

briscoes just cancelled there dividend and no guidance given. hlg will be next in there update

I agree, and if they don't it is completely irresponsible from the board.
A complete shutdown was inevitable, a little shocked it'll come in 48 hours. I thought 2.20 was expensive on Friday. I think 1.82 is expensive now.
This is going to be brutal for retailers.
Who knows how long we will be locked down for.
It could be many months based on some modeling.
Crazy times.

[James108]

If 1.82 is expensive where do you think fair value is? And what have you based that on?

[Snoopy]

I agree, and if they don't it is completely irresponsible from the board.
A complete shutdown was inevitable, a little shocked it'll come in 48 hours. I thought 2.20 was expensive on Friday. I think 1.82 is expensive now.
This is going to be brutal for retailers.
Who knows how long we will be locked down for.
It could be many months based on some modeling.
Crazy times.

If 1.82 is expensive where do you think fair value is? And what have you based that on?

Fear.

In a situation like this, it is possible to imagine a future scenario as gloomy as you like and in your own mind it is real. I would suggest 'zooming out' and looking at the bigger picture. First reflect on the facts.

1/ HLG is right at the top of the retail class on stock turn, profit margin and store design. They have no term debt, even if some of those lease terms look onerous right now.
2/ HLG is a gold star tenant that lifts the appearance of any shopping precinct they are in.
3/ HLG sells stuff that everybody needs: clothes

Now consider that if retailing as we know it were to end, who would be the last to turn out the lights. HLG would be near the top of my guesses.

Now consider if the mall owners lose HLG, which other brands would have gone before them? Probably everyone else except the coffee shop. Do you really think the future of shopping centres is as a ghost mall with a coffee shop?

The 'new normal' will be different to what it was. There will be compromises to be made, in rents, in stock turn and maybe even in fashion. And yes shareholders on the 'retail end' and the 'building rental end' will see some pain.

However do you expect Jacinda to spend her next election campaign walking through empty shopping streets dressed in rags, like a cave woman, and handing out shekels to the former retail workers turned squatting beggars so that they can boil up a dessert spoon full of rice for dinner? Get real!

The new reality will be a compromise, but it won't be as calamitous as some here think. Fred Flintstone will be elected prime minister before some of these doomsday predictions for HLG on this forum come true.

SNOOPY

[winner69]

They will do a strategic withdrawal from Oz I reckon

Going to be too hard and risky to make a buck over there

[Stranger_Danger]

However do you expect Jacinda to spend her next election campaign walking through empty shopping streets dressed in rags, like a cave woman, and handing out shekels to the former retail workers turned squatting beggars so that they can boil up a dessert spoon full of rice for dinner? Get real!

SNOOPY

She could buy some clothes online?

As for the shekels, I can't think of a person I've talked to in the last week that isn't currently implementing plans to get as much "free money" as they can from the Government, through any scheme possible, producing any explanation that is plausible.

The shekels part is happening now, but like the clothes buying, it is happening electronically.

[Flugenbear]

Good post Snoopy.
And I agree, they are a top player and logic says they will come out OK.
But the thing right now is the uncertainty.
No one knows.
Will this be 4 weeks, 4 months, 1 year?
I won't even try to answer James's post....I can't. I have no idea where fair value is.
All I know, for me, 1.82 is expensive.
Because of the unknown.
For others it might be a bargain.
They can fill their boots, and my sincere good wishes to them.