With the share price off more than 60% from its 52 week high, I expect some of the long serving members of the board to resign. I think this time the pressure to resign will be too high to resist. This includes the chairman, Bill Stevens, who a few years ago said that he doesn't believe that the alignment between shareholders' and the board's interests is best achieved by asking the board's members to have meaningful amount of shares invested in TRS.
The problem with TRS' business model is the need to keep making astute buying decisions season in season out. One bad buying decision for a crucial season such as Christmas can mean big stock writedown in January and February.
I also believe that this marketing segment targeting customers' weakness for impulse buying is now owned by Aldi. Just look at Aldi's weekly catalogue, there doesn't seem to be any segment that it doesn't have its fingers poked in.
I also note that TRS' latest announcement about trading weakness in WA coincides with Aldi's ramp up in that state. With Aldi still in the beginning of its roll out program in WA and SA, I think more difficult period is in store for TRS.
To be honest, as much as I try, I can't think of anything that TRS can claim as its competitive advantage. With the market dynamic significantly different from 15 years ago when TRS started its life as a listed company, the next 15 years (if it still survives by then) will be much more difficult than just the typical store roll out story.
TRS Price at posting:
$5.11 Sentiment: None Disclosure: Not Held
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