I cant say I was as pessimistic as you, but I can certainly see why you would reach that conclusion.
I have been following Dusk quite closely. I track every movement they do. Here is some of my own personal insights that I seem to be gravitating to in my discussions:
During Peter Kings reign he was running it during the best selling conditions (ie easy money and plenty of discretionary spending). Whilst this looked great on paper, the actual business itself became complacent. The products and ideas became stagnant. There was very little marketing. The marketing that was being done was basic - the campaigns were nice photos, but seemed to lack strategic timings. Additionally, the campaigns were not being pushed onto the customer. They were filling a gap/ticking a box. During this time, I can imagine that because spending was so successful it would have been easy to say 'Well whatever we are doing is working, there is no need to do more'. This is all well and good until the spending slows down, which it did. Dusk became a victim of its own success - it became complacent. I think Vlad has seen this too, because the first move he made was hire a Chief Marketing Officer and put a focus on rejuvenating the brand.
My bet on Dusk was based on the idea that dusk is still profitable without much extra effort. They can in fact rely on people simply walking past the stores and purchasing gifts at Christmas. This of-course doesn't make it a titan in the retail sector, but it does highlight to me the demand for the product. My idea was that if they can get ontop of the marketing and actually start
selling the product then we should see some better results. I dont want to conclude that this was right too early, but I get the feeling that this has been proven with the Allens Collab. The marketing has been exceptional for it. Fo rexample, they used Facebook influencers, one example of 3 'viral' achievements ive seen is
here and I have also seen an Instagram Influencers (a MAFS chick) to push it. They also put up advertisements on walls, done re-targeting on google adwords, and I also noticed the strategic timings of the Allens releases. It has been released in phases with different product types and smells to keep the interest going. It doesnt surprise me they have achieved a 28% increase on last year because they put effort into it.
I think this company is going in the right direction under Vlad. On a personal note, I have met him and he strikes me as entrepreneurial, high energy, honest and fun guy to work with. The one draw back I had of him is that he doesnt strike me as a markets guy. I think he is likely great at his job and getting the job done, but I think he is learning the markets with a steep learning curve. I don't see him as understanding the benefits of a buyback or even comprehending that part of the strategy this early in the game. I think he has more pressing issues to worry about at the moment. This however should be with the board. The board should be guiding this part. I think they lost an opportunity to buy back 10% of the company when the share price was low. I have been pushing the board for an answer on buy-backs. They keep highlighting that they would have borrow money, but this is a deflection. Ultimately excess capital is getting distributed in dividends, and they have a choice between a divvy and buyback, and they choose the divvy. They do not have an equity strategy that would guide the board in these decisions in place, and this is something I would like to see.
All in all, I think Vlad is an asset and the new team is also an asset. They are closing gaps and its great to see. I was expecting positive news after following the team on linkedin and seeing the changes in approach. I think if they get Christmas and Halloween right on the marketing we will have even better news. I have no doubt the team are already working on campaigns. Fingers crossed the Allens selling keeps going.
(20min delay)