If you've ever seen a fight break out at a garage sale over some old trinket, something that looked completely worthless to you, you might have an idea of just how some of us retail-watchers feel about today's announcement that J. Jill
This $24.05-per-share cash offer trumps a recent bid from Liz Claiborne, which trumped a previously rebuffed Claiborne bid, which trumped a rumored Urban Outfitters
As an investor who's watched Jill pretty closely off and on, my first thought was surprise. My next was regret or something near to it -- because I gave these shares a serious sniffing about the dozen-dollar mark last year. My conclusion then was that Jill was a no-go. Some observers might have thought we were seeing a company bottoming out of a dive. I thought we were looking at a firm that was increasing sales while consistently losing profitability. A few upward blips up wouldn't fool me into buying the turnaround story.
Take a look at the tape:
2001 |
2002 |
2003 |
2004 |
TTM as of 9/05 |
|
---|---|---|---|---|---|
Revs.* |
$287 |
$347.6 |
$376.9 |
$434.9 |
$438.2 |
Net Inc.* |
$13.1 |
$18.4 |
$7 |
$8.7 |
$1.1 |
Gross Marg. |
34.2% |
38.1% |
33.6% |
36.0% |
33.4% |
EBIT Marg. |
8.2% |
9.4% |
3.4% |
3.5% |
0.4% |
Net Marg. |
4.6% |
5.3% |
1.9% |
2.0% |
0.2% |
Data courtesy of Capital IQ.
Now you know why I didn't put my own money on the line. Now you know why my Fool colleague Alyce Lomax called Jill a Halloween trick. Now you know why Rick Munarriz advised investors to take the money and run back when the Liz Claiborne offer came through. And now you know why I'd be worried if I held Talbot's stock.
Of course, Talbot's hasn't exactly been tearing it up lately, last quarter's "beat by a penny" notwithstanding. Will two mediocre prospects lashed together make a better business? It's possible, but with competition like Ann Taylor
For related Foolishness:
Seth Jayson spend far too much time in women's clothing stores which, he reminds you, is strictly a "comfort issue." At the time of publication, he had no positions in any firm mentioned here. View his stock holdings and Fool profile here. Gap is a Motley Fool Inside Value recommendation. Fool rules are here.