March 23, 2018

Both institutional and individual investors have been doing their dough on Myer for more than 10 years now. Why? It’s a ‘value’ addiction the market just can’t shake.

Myer’s share price has now fallen for nearly 8.5 years straight. There has been occasional respite each time the company presented a new strategy, but generally it has been false hope. The stock has lost 91% of its value since listing.

It is and has been a classic value trap.

The traditional bricks-and-mortar retail industry is in structural decline, same as newspapers and television, caused by the massive disruption from online and mobile.

Department stores are the poster child for this decline. They were invented to showcase the wares of the world in one place at a time when travel was a rare treat and people marvelled at exotica from afar. Pretty sure this is not an issue today … one click and it’s in front of you, no need heading to the mall. Even if you do end up there pretty much everything on sale inside Myer is also a...

October 13, 2017

Glennon is a shareholder in Vita Group (VTG.ASX) and this week we caught up with CEO Maxine Horne and CFO Andrew Leyden.

Vita operates just over 100 Telstra stores and has recently extended its business into selling Telstra’s product suite into small and large corporations. It is Telstra’s largest partner and has demonstrated a strong history of out performance since taking on the brand. In May this year Telstra made the decision to cut cost by 30% across the board and that included the commissions it pays its partners, including Vita. It has had a material impact on Vita’s earnings, most notably in FY18 and FY20, and certainly tested the relationship. The Telstra management that delivered that edict has already moved on and as recompense for the dramatic nature of the cuts Vita has been granted permission to increase its store numbers to in FY18 and 115 in FY20. We suspect further consolidation will take place amongst Tesltra stores owners, who by nature are typically small, leading to...

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