Every company on the planet goes through good and bad times, the question is if they can recover or not. I'm taking a punt and saying with Allensford's influence yes - without them, I would've sold my remaining holdings last year.
Rich people get rich for a reason. Attempting a take over of $60M + for one of Australia's most recognisable brands with one of the widest distribution networks in the country is a calculated decision, not a punt.
Large dollar values are hard to visualize, so can always apply a different perspective and work out what else you could do with that $60M to see if it is a good deal or not. $60M will buy you 50 houses in Sydney's West, that's approximately 7 stores per house. I'd hands down buy an "independent" Reject Shop store, franchise style, if they'd sell it to me for $170k (eg what each store is worth at current market cap). If I visit my business broker and look at similarly sized but independently owned discount stores, they're selling for around the $500k mark without the brand or distribution network if they wish to grow, but obviously lower overheads. These are valued similar to when TRS traded around $6 for years.
Declining sales can be reversed, but it takes a lot of time and money to set up a far reaching network like TRS.
If the new board can increase the same store sales our pain will be worth it.
TRS Price at posting:
$1.99 Sentiment: None Disclosure: Held
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