Saks Global Getting Assurances, Which Definitely Means Trouble Not Over
I've often found that the greatest public assurances often come at a time right before the company is in the greatest trouble.
After all, if a company was just fine, the company wouldn't need to say anything. Its customers and results would do all the talking. In recent analyst reports before and after a BMO Capital meeting:
* $350M in funding just in time to place Christmas orders? What would the company's Christmas be like without this financing?
* What was the terms on this financing?
* What happens if said inventory doesn't sell through like expected?
Even in good times, most retailers are only two bad quarters of inventory buys away from a bankruptcy. Saks is teetering.
Furthermore, executives are expressing "confidence in their liquidity". Again, you don't need to express confidence in your liquidity, if, you know... you have confidence in your liquidity.
Hendrik Laubscher put it one way in his recent newsletter: what would happen to luxury if Saks goes out of business? I might put it another way -- what happens if Saks stays alive and this is as good as it gets?
