It is an old maxim of mine that when you have excluded the impossible, what remains, however improbable, must be the truth.


~ Arthur Conan Doyle

 

 

 

 
 

PROBLEMS AND SOLUTIONS

 

Whether you are an institutional investor, a new forward-thinking member of senior management or board member of a retail company - or a creditor / insurer - it is important for you to understand our methodology because we have used it successfully in many different applications. The process is the same whether we consult to a new management team in retailing or to a fund manager on Wall Street. What is essential is our track record. Using our metrics, we have predicted nearly every major retail business failure. When it comes to turnarounds, we employ the same metrics to predict retail failures that we use to fix troubled companies. Our position is this: it makes no difference if you are a corporate manager or a fund manager, the better your stock performs, the healthier it is for everyone concerned.

 

THE PROBLEM

 

Since 1990, more than two hundred retail companies have filed for bankruptcy.Among the most notable are Revco Drug Stores, Ames/Zayre, Crazy Eddie Electronics, Phar-Mor Drug Stores, Leslie Fay, Merry-Go-Round, Hills Department Stores, Macy's, Roses, Grossman's Home Improvement, McCrory's,Caldor, Service Merchandise, Filene's Basement, Nobody Beats The Wiz, Bradlees, Hechinger and Strawberries Records. Correlations should have been made to identify a troubled retailer in-the-making long before any of these companies filed for bankruptcy. But historically, there have been no financial advisors who had the resources and experience to make those correlations.

 

As the stories of these failures unfolded, institutional investors, investment bankers and numerous other shareholders began to ask questions, such as:

  • Was the company being operated in an honest and ethical manner?
  • Had management been reckless in operating the business?
  • Could bankruptcy be avoided?
  • Can the value of the business be salvaged?
  • How can the assets of the investors be protected in the future?
  • Had the business been operated with the best interests of the shareholders in mind?

 

THE SOLUTION

 

Yake & Associates, Inc., predicted every major retail failure long before it occurred because, in every case, we recognized the telltale signs of a company-at-risk:

  1. In most cases, the inventory was overstated and/or manipulated to conceal operational errors, mismanagement and in many instances, fraud.

  2. In every case, losses were erroneously attributed to a vaguely defined category known in the retail industry as shrinkage.

  3. And most important, in every case, if there had been timely and proper intervention to identify the business practices that were contrary to the welfare of the shareholders, disaster could have been prevented.

 

top

 
Yake & Associates, Inc.    •     Email    •     207-985-6320    •     P.O. Box 42, Kennebunk, Maine 04043