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URL:  http://boards.fool.com/interesting-tread-from-yahoo-15354906.aspx

Subject:  Interesting tread from Yahoo Date:  7/12/2001  2:04 PM
Author:  PiSquare314 Number:  65 of 71

Venator's missmanagement practices
by: analysing_and_thinking (30/M/New York, NY)
Long-Term Sentiment: Hold 07/12/01 08:42 am
Msg: 8844 of 8846

I cheered to Venator's announcement to open 1000 new stores... but then I started to ask myself who's going to do it? What is the real ROI ?

To my dismay, it seems that the 3 departments in charge of revamping, moving or opening store have no idea what each other job is - there are no procedures, no job descriptions, nobody knows who are the bosses or who is responsible. It's like a bad case of the 1980s - they are playing ping-pong with responsibilities.

While it is already dubious that 6 project managers can cover a territory where over 400 stores are being remodeled, moved or opened, how can the 3 purchasing coordinator support them (only !) and manage all of the buying, shipping, budgeting, etc. That's over 1 store every two days, which is an average of 20 POs and revisions per day !?! I hope they are well paid since the whole business model relies on their ability to perform under this “huge pressure”.

Well, I thought "good they are saving costs", but how many bad POs, mistake purchase, delayed opening ? Surely, someone has looked into it to make sure that they are saving money ? At a rate of over $2000 per loss days of sales, lack of communication or time to do the job properly, I estimate that in the first 6 mths they have "loss" over $3 million dollars in store opening delay, miss-quote, and other lack of operation control/resources – that's already 1% of EBITDA margin !

As it stands, without appropriate actions or increase margin in pure sales, I do not see the stock passing the $16 threshold…

Recommendations to Venator: please do us and yourself a favor and take the following necessary steps: written processes, job descriptions, assignment of responsibilities, more purchasing coordinators and project managers.

Questions to investors: can anyone comment on the quality of their systems and IT support ? Could Venator be more efficient and save money over the long run by upgrading any of them ? If so which ones ? Have anyone estimate the level of cannibalization and cost of store opening/share-market ?


Re: Venator's missmanagement practices
by: ocdesign70
Long-Term Sentiment: Buy 07/12/01 01:56 pm
Msg: 8845 of 8846

It's so obvious that you must be an employee (or former) of Venator to know so much!

I agree with you that without improving margins and other numbers, the stock is not getting past $16.

OC


Re: Venator's missmanagement practices
by: pisquare314
Long-Term Sentiment: Sell 07/12/01 02:01 pm
Msg: 8846 of 8846

Interesting comments... Yeah, surely an employee or former, or someone who've been talking to some. In any-cases, good info. Thanks for the insights. I'm getting out if employees start to rat.

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