December Retail Sales, page-2

Hi pCap.

I have ordered The Most Important Thing on your recommendation.

Retail conditions are bad and look to get worse as Australia experiences a balance sheet recession (the worst sort) on land price falls and heavy debt.

There is widespread discounting, which will only make a modest difference as consumers simply aren't spending as they used to.  Most clothing is manufactured in China or Bangladesh etc.  T-shirts cost $2 to make and retail for $20 - the margins have been huge.  We are about to witness a retail catharsis as those who can cost-out fastest win.  Retail RE is stuffed as tenants offer blunt choices - rent cuts or we leave, now choose.

PGR is not immune, though better placed than just about anyone.  Swimsuits and sporting apparel are safe.  Some of the other lines will struggle, though can survive on cost-out.

Many competitors will/are going to the wall.  If PGR' can match its no debt with fast footwork, it should survive and be better placed competitively in the future.

Ash