I am really confused why did a branded products company like Oroton buy Brooks Brothers and Gaps in Australia? Those are retailers, which is a completely different business, far lower margins, far more volatile and less attractive businesses. If Oroton wanted to make investments, why not invest in additional branded products that complement their existing offering?
I think that part of the reason the company's stock is falling off a cliff is their strategy for recovery looks utterly random.
Another question I have is why do they maintain such a low cash balance? It looks like they have been paying out all of the free cash flow as dividends, which for a branded products business that has room to grow product offerings and market share seems like a mistake.
ORL Price at posting:
$2.12 Sentiment: None Disclosure: Not Held
