Sunday, June 17, 2012

The private sector is doing just fine. Part 1.

Around Christmas of last year, I walked into Best Buy and saw how much space they were devoting to kitchen appliances and knew right away they were in trouble. Some of that stuff has a really long turn over rate. Like sinks.

So, today when I walked into Fry's Electronics (One of the largest electronics retail companies on the West Coast. It's double or triple the size of Best Buy, or it dead cousin Circuit City.) and saw the stores were packed with these items - understandably I also realised they were in trouble. Circling the drain kind of trouble. When perfume, stuffed animals, and Hello Kitty are packing your shelves instead of electronics - there is something really effing wrong.

Even more frightening was what they weren't selling. Every single isle was missing about 10% of it's stock. Mr S. finally walked up to someone working there and asked about it. They basically said customer demand was down, so they weren't stocking as quickly. I took 30 pictures to show you I wasn't just cherry picking my data. The whole entire store was this way. Except the stuffed animals at the top.


  1. You may be onto something. The forums are all a buzz about Supervisors now having to go 100% commission based and the glassdoor reviews on how they manipulate their payout system is pretty revealing. You can only get away with this for a little while before your sales people leave you.

    They must be in a lot of trouble in order to take these types of measures. Pretty hard to earn a living as a sales person when you have to sell stuffed animals instead of high priced video cameras to earn your wage. Apparently, if customers use a coupon or take advantage of their price match system the sales person actually gets nothing :0 soooooo, if you want to go in there without having some pushy person follow you around, just grab one of the circulars and they'll avoid you like the plague.

    Keep an eye on Southern Products Inc (SNPD) stock price (currently $3.45), they make the Sigmac TV sets and nearly 80% of their revenue comes from Fry's. Without the Fry's contract, their $75 million market cap is probably worth closer to $20 million. They won't report their numbers for another 3 months, but when they do it will be revealing if Fry's is having trouble with their finances.

    Last February, SNPD had to pledge all of their assets, in order to get an account receivable loan from a bank. At the time they said it was for "factoring" reasons, but your post makes me wonder if Frys may be getting late on the bills or at least stretching out the payments. This would be a classic sign of trouble for any retailer.

  2. Since it's been nearly a year, I thought I'd follow up on this post to see how your Fry's is dying thesis played out. Not sure w/ Fry's because their internal numbers are private, but holy cow take a look at SNPD, they're now at .07 a share. I hope the automated hedge funds have your RSS feed because I'm thinking that your nailed this one and that their suppliers are feeling the contraction. In semi-unrelated news, Frys may have to pull all of their Coin OP crane games in California because the dept of gaming is saying that they are gambling devices. Safeway has already yanked theres and it's causing quite a bit of indigestion within the coinop community because the crane games are one of the few remaining profit centers.

  3. HEY! I've been thinking about sending you a private email the last few days. I hadn't seen you around and wanted to check on you.

    The last time I was in Fry's it looked like a toy store. I think I even made a post called Frys' R Us or something like that. I think its about time to go back in and do a spot check. SNPD...yow. That is painful.

    I'm going to do some river panning this summer. If you want to go on one of the trips shoot me an email. No rain this winter means low rivers. It can't have been the craziest thing you've done.

    Hey, can you sign you posts with a ~ or something. I get a lot of anon spam, and sometimes if I haven't had enough coffee I just start whipping through with the delete button. I'm pretty sure I've accidentally axed a few of your posts that way.

    Since you don't sign them, and spammers don't sign them, you get the idea.

    Good to see you.

  4. Oh I've done quite a bit of panning in my life. I grew up in the mountains and my Dad has the gold bug big time. He even took a gold panning trip to Alaska. You should start by panning your own soil to see if you have anything in your back yard. It's more exciting when it comes from your own land. This whole area was once gold country, so you'd be surprised what you can find. Life is going well, but am working like a dog. We're 30 days away from the launch, so it's pretty much pedal to the metal non-stop these days. I still read all the 3D printing posts eagerly. Once we get the money to burn, you can bet we'll be adopting the technology in our shop. - DF :)

  5. Na.. I'm not going to waste my time on areas that are not known to be productive. I've turned all my soil mainly because I gutted the yard. I did find this funny rock I'm going to cut open once I feel like torching a tile blade. Normally I wouldn't even go out, but there was 0 snow pack in March. The streams will be low.

    I hope nothing but the best for you! It seems like forever, but I guess it's only been 6 months or so.. right?

    No hurry on the 3D printer. They are bringing up new models all the time. Let the technology percolate. No need to be the guinea pig.