Update from BAP today, refers. Summary: BAP's Retail segment is...

Update from BAP today, refers.

Summary: BAP's Retail segment is under pressure, while its Trade segment is hanging in there.

In terms of relevance to GUD, being a pure wholesaler, the appropriate analogue is BAP's Trade business.

That said, it isn't as if GUD's end markets aren't dependent on discretionary spending; they are.  Just not to nearly the same extent as BAP, with its large store network (and the attendant lease obligations, which GUD doesn't have).

So, I think that GUD,  being less operationally leveraged, is the better-quality business model.

(However, I don't think that makes it a given that GUD's current business momentum will be meaningfully superior to BAP's Trade business; the Australian economy is limping along and I don't see much in a way of interest rate relief to kick start it.)

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