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The Land of 10,000 Thumps


"Home is where the Heart is"


"You can't go home again" Thomas Wolfe

Mr. Wolfe was only metaphorically correct. You can, in fact, go home again. Judging by my experiences during the last 5 days, spent in my personal homeland, you'll simply find the place more appallingly humid than you remembered or even imagined was atmospherically possible.

Other observations and pent-up-things-to-share from my 5-day hiatus from the Ville's friendly confines:

Department Stores: Not Dead Yet?

The veteran crew at the former Daytons, then Marshall-Fields then May (MAY-acquired) and soon-to-be wholly-owned division of Federated Department Store Roll-Ups Inc. (FD) store in downtown Minneapolis is delighted about the new parent, at least so far.

"The guys from Federated seem very bright and focused on the stores. It's a shame to lose all those jobs but the store is running well!" according to my life-long friend, Marilyn (from the Oval Room in the Minneapolis store).

"Flying Northwest? Do you feel lucky?" - A sign being waved in my family's general direction as we capered through a picket-line of the striking mechanics at Northwest Air Lines (NWAC).

Though I suspect the gentleman and his piece of vaguely threatening tag-board were being rhetorical I'll take the liberty of sharing my responses, in order.

"Yes, I (was) flying Northwest... roundtrip, in fact. My feelings about the experience were, in no particular order; Searing pain in my legs as a result of being squished in row 46, mild outrage at being charged $1 for peanuts, ditto for the $3 "snack-box" price, pleasant surprise at arriving on-time on both halves of the trip and some mental duress caused by flying even with the most perfect 2.8 year old girl.

"Though it's more of an 'idea' than a 'feeling', I also think that the person who spent the last two decades redesigning the MSP airport to ensure that visitors walk at least 3/4 of a mile to rent a car should have the soles of his feet beaten with clubs.

"At no point do I recall feeling 'lucky' about choosing NWAC, but thanks for asking!"

Karnac-Tribute-Special: "The answer is: 'Nearly 11 feet of Napoleonic Complex' in one corner office!"

The question was "What's the 'instant synergy' of a merger between Tom Siebel (SEBL) and Larry Ellison's corporations?"

More on Best Buy

Earlier in the Buzz, I mentioned my Boo-ish inklings on Best Buy (BBY). A few points are worth clarifying:

  • Don't translate my saying that I came to investment conclusions, in part, based on store visits as a blessing on my part of what's come to be known as "Peter-Lynch Investing". For better or worse, being a child of retail, a former retail-worker and former retail-industry consultant has made it impossible for me to casually "shop", as I understand lay people to mean the term.

Retail stores are all designed to give shoppers an immersive experience. Merchants themselves can't really have this experience while shopping; much the way professional magicians view tricks differently than an audience would.

  • So, when I bought a Sony (SNE) PSP at Best Buy last week what I "saw" was: A store that had major out-of-stock problems (not just in video games but in DVD's, printing supplies, "electronics" [DVD players and the like]), staffing problems, and atypical (for BBY) store cleanliness issues ("the Radio Shack (RSH) Look"). Best Buy has a reputation as one of the top operations in retail and, at a P/E of 25x, the stock reflects it.

Best Buy had their PSPs literally locked in an unattended cage. As a general rule, cages seldom delight customers who aren't at that moment attending a Motley Crue concert.

Best Buy was out of stock on the Tiger Woods title for the PSP. "For weeks", according to the PSP-gatekeeper I finally tracked down. Once in Minnesota, I found that Target (TGT) had the game in-stock and on-sale.

  • Again, I remain negative on the line-up of consumer electronic offerings for the balance of the year. I think video game estimates remain too high. Should the XBox360 be delayed by even a moment the reality of a hard Christmas is going to loom large for the electronics guys. And it's a hard business to begin with, as we've discussed.

  • I'm doing more work on Best Buy, as an idea. The stock is fairly wild, for a company its size. It's not to be trifled with, as a short. That said, I'm seeing troubling things, from an operations perspective, when I go into Best Buys of late. Something is amiss and it seems to run well-beyond one-store (or simply the above PSP buying experience).

What the Elle is Wal-Mart (WMT) thinking?

From today's Buzz:

I'm too sexy for my reputation...

According to the NY Post, in its latest effort to compete with Target's (TGT) 'cheap chic' image, Wal-Mart (WMT) will hold its first ever fashion show as part of a broader alliance with ElleGirl magazine.

At the risk of being a naterring nabob of negativity, this Wal-Mart initiative into fashion is not going to work.

Target's "cheap chic" image is rooted in both their product and, getting back to the above point about "immersion", the look and feel of the stores. Wal-Mart will be extremely hard-pressed to become chic without first redesigning, then learning to clean their stores.

Remember, until about a month ago this was a chain dedicated to selling groceries. Bentonville shouldn't underestimate the distance between their current image and "trendy".

In support of Wal-Mart's not-ready-for-prime-time-Chic, I would submit that holding your first ever Hip Young Chick fashion show after every grade and high-school on earth has already started class is less-than optimal timing.

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Position in BBY

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