Frenchy
Aktiv medlem
Bikester omstartar?
My comment has NOTHING to do with their current operation as far as the consumer is concerned but is about what is happening under the hood.De har varit sjukt billiga på utrustning och kört prismatch på priser sedan 2014 minst. Började handla där då och för det fortfarande. Sen att de har stålet en del av företaget till en kapitalfond 2021 har inte ändrat något i deras affärsmodell ännu vad jag har märkt? Vad menar du att de kastar bort pengar just nu i cykelgear? Är det för att de bytte namn i Norge och Sverige? Här i Danmark har de ju fortfarande samma namn?
What I mean is that ALL equity funds have a grow-or-die mentality.
They then inject a lot of money (though leverage borrowing) to help with this.
It can be a good strategy in a booming market and when the cost of borrowing is so cheap it is almost free.
And for now, the consumer is the winner with more competition and lower pricing.
But eventually, they need to make a profit. And there is the issue. This is getting a lot harder and if they see no path to profitability they throw away the towel and leave the company to die under the debt burden that they created.
In this case, they were fairly profitable at the time of share acquisition but their profit dropped by more than 50% between 2021 and 2022 annual results when the market was at its highest. I can't see how 2023 will be better and if they go in the red as I expect them to, how long before they run out of runway?
Again, I have been wrong before... And this might be another case. But right now in the outdoor RETAIL industry, the bigger they are, the harder they fall because they are usually leveraged and this has become very expensive almost overnight!

