I actually think GXL management were quite competent at acquiring vets and were doing very well at bedding them down. Converting a generation of mums&dads style stores to a corporate structure was always going to be difficult and after much trial and error they had a model which worked, a model which is now likely to be mimicked.
Even though I have sold out I still watch this closely as I followed the growth trajectory from the very beginning and sold out shortly after the mammoth acquisition.
i am hoping that management can turn this around and prove they have big-box retailing skills. as the method has definitely worked in other countries.
what this brought home to me is how easy it is for management and the fund managers to be distracted by the allure of fee's from the bankers side... and large revenue and balance sheet numbers from the executives side...
If this doesn't work out for GXL I hope that they are able to either spin out the retail and vet businesses out separately... or perhaps sell the retail arm to someone to negate the debt balance.
That would at least allow them to focus on what they were once good at.
GXL Price at posting:
$6.04 Sentiment: None Disclosure: Not Held
