Well this explains a little more while Murray was happy to cut and run. Clearly Blundy and Itaoui would have known the current situation two weeks ago, before making their offer to allegro and Murray. Therefore you would think it’s unlikely that they will reduce or pull their offer, unless they feel they can really squeeze murray/allegro and are happy with the bad press/pr.
Couple of things to note. Firstly Murray made poor predictions and decisions in the first 6 months re stock and online and then despite plenty of conviction and confidence, poor guidance and predictions in the second half. Probably a good time for him to exit the show.
Secondly currently value shoppers who are spending less in total, are outweighing any net effect of migration to value from the middle range shoppers. That or they are losing market share to Kmart/target.
Thirdly covid created an aberration in terms of online shopping and retail sales in general giving certain retailers bumper years between 2020 to 2022.
At these sorts of levels of NPAT, you can only conclude that the company is fairly valued currently. However you know Blundy, Itaoui see an opportunity here and with Berchtold on board as well you can be sure they will shake things up online and in store.
Happy to hold and watch this play out, with Blundy the best operator in retail and savvy investor at the helm, in what is an essential market. I believe they will find some low hanging fruit both in better marketing and changing up the image a little.
BST Price at posting:
$1.86 Sentiment: Buy Disclosure: Held
