Saturday, 17 January 2009

Art Nadel Fund Manager - Is He Playing Hide and Seek

Florida based money manager Art Nadel, who works for Sarasota-based Valhalla Management is missing. The major new network to break this story was CNBC earlier yesterday.

Nadel's wife, Peg, confirmed he is missing but would not say for how long which has kind of added fuel to fire of speculation considering that Nadel could be one of the major suspects in a large scale financial investigation.

The details of this probe are still very vague at this time with Sarasota police still yet willing to confirm detailed information about the case.

This isolated situation unfortunately personifies the tough economic times that are ahead notably in the financial sector, and the dissapearance of Art Nadel at this stage is at this stage rife with speculation of the who the whats and the when's.

Friday, 16 January 2009

Circuit City Liquidation Bad For The Company, Good for Customers And Competitors

Dow Jones
January 16, 2009: 01:53 PM ET

NEW YORK -(Dow Jones)- The liquidation of Circuit City Stores (CCTYQ) may end up being a tough sell for the company itself and is sure to carry impacts for its competitors, retail consultants said.

The second largest electronics retailer behind Best Buy Co. (BBY) may not be able to draw foot traffic even with going-out-of-business sales because consumers, as demonstrated during the Christmas holiday, aren't buying despite deep discounts.

Even an "everything must go" approach may not stir an abundance of interest because shoppers are becoming used to such proclamations, analysts said.

"I think Circuit City will be able to liquidate through its stores, but it will be challenging," said Gregory Segall, managing partner of private-equity firm Versa Capital Management. "Moving merchandise will likely be tough no matter how motivated Circuit City's liquidators are."

Circuit City operated 567 U.S. stores as of Dec. 31, making its liquidation one of the biggest in recent memory and pouring merchandise onto a consumer- electronics market where Best Buy, Wal-Mart Inc. (WMT), Amazon Inc. (AMZN) and, to a lesser degree, RadioShack Inc. (RSH) compete.

There are also scores of regional electronics chains, like P.C. Richard & Sons in the New York area.

In the short term, at least, rivals will be hurt by what Circuit City is able to sell, especially as its discounts get deeper, analysts said.

Circuit City "will pull down prices for the other retailers," said Craig Rowley, national retail-sector leader at the Hay Group consulting firm.

"We're in an environment where 30% or 40% isn't uncommon for healthy retailers," Rowley said. "Circuit City's liquidators will probably end up offering higher discounts."

As a result, the other retailers, many of whom spent the last few months cutting inventory so they could move new products at higher prices, will again have to engage in margin-hurting discounting, Rowley said. "Spring will probably be tough for them," he said.

But there is also going to be a less crowded consumer-electronics field, and that's to the benefit of Circuit City's competitors, especially Best Buy, analysts said.

Best Buy's domestic comparable-store sales for the fiscal year that ends February 2010 could see a 7-percentage-point benefit from the liquidation of Circuit City, said Jack Murphy, an analyst at William Blair & Co.

Circuit City filed for Chapter 11 bankruptcy protection on Nov. 10, hoping to continue operating as it found a buyer.

The company said on Friday it will begin liquidating.

Analysts said the move was most likely spurred by its lenders, led by Bank of America Corp., which were becoming fearful that the company wouldn't be able to get rid of its merchandise before it would have to start vacating stores.

Spokespeople for Circuit City and Bank of America didn't return phone calls for comment.

Once a retailer files for Chapter 11, it has 210 days before its landlords can move to evict it, or negotiations will have to occur to extend the timeframe, Segall said.

-By Karen Talley, Dow Jones Newswires; 201-938-5106; karen.talley@dowjones.com