Dillard's

[bchris02]

A very disturbing article about Dillard's future appeared on Arkansas Business. I knew high gas prices were hurting their sales, but some analysts are saying they won't survive another 5 years. Anybody have any opinions on this or the future of the company?

http://arkansasbusiness.com/article.aspx?a...19118&cID=j

[bchris02]

Dillard's stock fell below $4 yesterday. This company was barely in the green when times were good. Things are starting to look very uncertain for the future of this company. Then again, the department store market right now is getting hit hard as a whole.

[Mith242]

Dillard's stock fell below $4 yesterday. This company was barely in the green when times were good. Things are starting to look very uncertain for the future of this company. Then again, the department store market right now is getting hit hard as a whole.

Like you said, sometimes they'd have a really good quarter. But sometimes they could also pull out a pretty bad one as well. And that was even before the big economic problems going on now. They're pretty big across the south and parts of the southwest. I don't know if I see them just flat out folding. Seems like they could file for bankruptcy and eventually try to come back from that when the economic situation is better. I could also see them possibly merge or get bought out by a bigger department store chain as well.

[bchris02]

Like you said, sometimes they'd have a really good quarter. But sometimes they could also pull out a pretty bad one as well. And that was even before the big economic problems going on now. They're pretty big across the south and parts of the southwest. I don't know if I see them just flat out folding. Seems like they could file for bankruptcy and eventually try to come back from that when the economic situation is better. I could also see them possibly merge or get bought out by a bigger department store chain as well.

Who would be in the position to buy them out right now though? Department stores in general are getting killed, but Dillard's is doing a bit worse than the others. Macy's isn't in the position to buy them, and I doubt anything lower-end like JCPeneny's or Kohls would. Dillard's has been around forever, and I hope they somehow survive this, but they are in a HORRIBLE position for a deep consumer recession as it appears this will be. Their stock price is starting to reflect that.

[Mith242]

Who would be in the position to buy them out right now though? Department stores in general are getting killed, but Dillard's is doing a bit worse than the others. Macy's isn't in the position to buy them, and I doubt anything lower-end like JCPeneny's or Kohls would. Dillard's has been around forever, and I hope they somehow survive this, but they are in a HORRIBLE position for a deep consumer recession as it appears this will be. Their stock price is starting to reflect that.

True, none of the other department stores are in great shape right now either. But if you look at the banking industry and the problems they have. It doesn't seem to be stopping some banks from buying some of the troubled ones. In the least maybe all of this will finally force the Dillard family to make changes with the company. They've often times run into trouble because they've made it a publicly traded company yet try to run it as a family business and keep investors out of the loop. Seems to me they've been trying to have the best of both worlds.

[Aporkalypse]

Dillard's stock fell below $4 yesterday. This company was barely in the green when times were good. Things are starting to look very uncertain for the future of this company. Then again, the department store market right now is getting hit hard as a whole.

BUY

Their assets are worth more than twice that (they own most of their stores, they don't usually lease). Last time it dropped like this it tripled within 6 months when people realized that.

[bchris02]

BUY

Their assets are worth more than twice that (they own most of their stores, they don't usually lease). Last time it dropped like this it tripled within 6 months when people realized that.

I'm sorry but in the 2001 recession, it bottomed at near $8/share and now its below $3.50. There wasn't a consumer slowdown in '01 despite the job losses in the tech sector. This recession is a very different animal. I get what you are saying, but I don't think department stores are a safe bet right now, at least until we get through the holiday season and we play a little Darwin.

[Aporkalypse]

I'm sorry but in the 2001 recession, it bottomed at near $8/share and now its below $3.50. There wasn't a consumer slowdown in '01 despite the job losses in the tech sector. This recession is a very different animal. I get what you are saying, but I don't think department stores are a safe bet right now, at least until we get through the holiday season and we play a little Darwin.

My comments then had nothing to do with the recession, and still don't today. It's about earnings which are an indicator of recession but have plagued Dillard's even in good times. Dillard's stock has been deflated by poor earnings as it should be, but now its assets far exceed the value of the stock.

If the total value of all outstanding shares is less than the value of the hard assets of the company by a substantial margin (and it is) only three things can happen:

1. Eventually the stock corrects to actual market value (or better)

2. The company sells to a bidder who has to pay a premium for the stock to adjust it at least to market value as the market will drive prices up otherwise and negate the bid

3. The company goes bankrupt and auctions off its assets which are worth more than the stock itself

Either way the shareholder makes money in this case. Dillard's stock jumped from $8 to $17 a share very quickly and out of concert with the rest of the market in 2001. Why? There was a report about all of the real estate Dillard's was sitting on. Think about it - Dillard's owns their stores, that real estate is quite expensive. They own their store in Pinnacle Hills and the ones in Park Plaza. Nothing has changed since then.

Will Dillard's eventually return to profitability? Probably not. That's no reason not to buy. This is little different than how the original Stephens money was made, buying bonds for far less than their market rate in a panic.

[skirby]

I wouldn't count on Dillard's real estate to pull them out. Since most of it is related to enclosed malls. Five years ago maybe but the market has changed and the land value has decreased since then. How much is land worth for an abandoned mall? Who would want to purchase one of their buildings at this time?

[Aporkalypse]

I wouldn't count on Dillard's real estate to pull them out. Since most of it is related to enclosed malls. Five years ago maybe but the market has changed and the land value has decreased since then. How much is land worth for an abandoned mall? Who would want to purchase one of their buildings at this time?

They aren't all in enclosed malls. They own most of their stores in newer lifestyle centers like Pinnacle Hills or Firewheel Towne Center as well.

[bchris02]

Dillard's laid off 60 employees today, including myself. They are trying to avoid bankruptcy, which is a very likely thing to happen after the Holiday season. The stock is trading for around $2.50/share.

Dillards (possibly) going belly up, Alltel laying off two thirds...things aren't looking too good.

[turboturtle]

Dillard's laid off 60 employees today, including myself. They are trying to avoid bankruptcy, which is a very likely thing to happen after the Holiday season. The stock is trading for around $2.50/share.

Dillards (possibly) going belly up, Alltel laying off two thirds...things aren't looking too good.

I'm sorry to hear the news that you were laid off.

Our daily lives are very scary right now. I recall that, after 911, there was a lot of fear about the possibility of there being sleeper cells all over the US. There was genuine fear that another attack was imminent. The fear was very real and shared by many. It was surreal. I think our economy has nearly put us back in the same state.

I'm sure you'll find employment again soon. If your single, apply everywhere. Don't hesitate to leave the state or head back to NWA. You're young. You have decades to recover. Little Rock will always be here.

[bchris02]

I'm sorry to hear the news that you were laid off.

Our daily lives are very scary right now. I recall that, after 911, there was a lot of fear about the possibility of there being sleeper cells all over the US. There was genuine fear that another attack was imminent. The fear was very real and shared by many. It was surreal. I think our economy has nearly put us back in the same state.

I'm sure you'll find employment again soon. If your single, apply everywhere. Don't hesitate to leave the state or head back to NWA. You're young. You have decades to recover. Little Rock will always be here.

I would say our lives after 9/11 don't hold a candle to what I've been through the past 3 months. Going to work everyday knowing your job is hanging by a thread, knowing layoffs are certain just not when they will happen, is not a fun way to live. The writing has been on the wall for Dillard's for a long time. As I said, they were doing very mediocre when the economy was good - they are in no position to survive a recession of this magnitude.

Part of me wants to stay in Little Rock because I have grown to like the town, but I will probably end up in NWA or out of state. Little Rock is losing a huge chunk of its white colar job base. There is job growth in manufacturing, but this wont replace what is being lost. Makes me sad because LR was on the edge of really becoming something. I think the exodus of the white collar job base will only make the crime problems worse and should bring much of the growth LR has seen over the past 5 years to a halt.

[turboturtle]

I would say our lives after 9/11 don't hold a candle to what I've been through the past 3 months. Going to work everyday knowing your job is hanging by a thread, knowing layoffs are certain just not when they will happen, is not a fun way to live. The writing has been on the wall for Dillard's for a long time. As I said, they were doing very mediocre when the economy was good - they are in no position to survive a recession of this magnitude.

Part of me wants to stay in Little Rock because I have grown to like the town, but I will probably end up in NWA or out of state. Little Rock is losing a huge chunk of its white colar job base. There is job growth in manufacturing, but this wont replace what is being lost. Makes me sad because LR was on the edge of really becoming something. I think the exodus of the white collar job base will only make the crime problems worse and should bring much of the growth LR has seen over the past 5 years to a halt.

I think you said it best when you said, "The writing has been on the wall for Dillard's for a long time."

I think it is unclear how Little Rock come out on the other side of the doldrums. Our City is not the only one experiencing difficulty. Many of the folks who will be effect by layoffs live in Benton, Bryant and Cabot. Those communities could take it on the chin even more than Little Rock.

[bchris02]

I think you said it best when you said, "The writing has been on the wall for Dillard's for a long time."

Yet Alex Dillard would rather run the company into the ground than give up control.

[Architect]

I would say our lives after 9/11 don't hold a candle to what I've been through the past 3 months. Going to work everyday knowing your job is hanging by a thread, knowing layoffs are certain just not when they will happen, is not a fun way to live. The writing has been on the wall for Dillard's for a long time. As I said, they were doing very mediocre when the economy was good - they are in no position to survive a recession of this magnitude.

Part of me wants to stay in Little Rock because I have grown to like the town, but I will probably end up in NWA or out of state. Little Rock is losing a huge chunk of its white colar job base. There is job growth in manufacturing, but this wont replace what is being lost. Makes me sad because LR was on the edge of really becoming something. I think the exodus of the white collar job base will only make the crime problems worse and should bring much of the growth LR has seen over the past 5 years to a halt.

bchris02 - I really hate to hear that for you my friend. I hope you find opportunities in Central Arkansas, and that you don't become another number in the "white collar" exodus you are referring to. I'm a glass is half full type of guy, so I hope all this mess sorts itself out in the next 12-18 months, and that our market, and the country is better for it (i.e. the unsustainable "consumer" culture of too many people living beyond their means is reigned in)!

[Aporkalypse]

bchris02 - I really hate to hear that for you my friend. I hope you find opportunities in Central Arkansas, and that you don't become another number in the "white collar" exodus you are referring to. I'm a glass is half full type of guy, so I hope all this mess sorts itself out in the next 12-18 months, and that our market, and the country is better for it (i.e. the unsustainable "consumer" culture of too many people living beyond their means is reigned in)!

There's always an ebb and flow as far as white-collar jobs. Little Rock used to be a major banking center and when the large banks bought Worthen and First Commercial that was a big blow. Eventually the market adjusted. LR has always been tied to the service industries for white collar jobs - medicine, law, insurance, banking, investments, etc and small local companies which come and go but the potential's always there. Alltel's wireline business is still there as Windstream and since the jobs being lost are going to be corporate (I hear 1000) we will still end up with far more telecom jobs than we did a decade ago. Dillard's layoffs at this point are tiny - 60 in a market of 680,000 though I agree eventually they will merge, be bought out, or simply go bankrupt and cease to exist. There's a lot of talk about Macy's, Kohl's, and Gap going the same direction.

The good news is for now unemployment of 4.1% in LR vs 6.5% nationally is a good thing. Manufacturing jobs will keep unemployment down but will there be new white collar jobs to retain and bring in more high income workers? That's impossible to answer, for any market except a DFW, Atlanta, etc.

The worst storm LR every weathered was the mass manufacturing exodus in the 1980s that saw Schwinn Bicycles, Timex and several other factories close and move out of the U.S. That left LR a high unemployment area and led to the crime of the late 80s/early 90s that made us so infamous. That can't happen in our current economy because it's more diversified.

Bchris, sucks to hear about that. Seems like you haven't been in that job long. What was your job description? I think you have to look at NWA or DFW if you're planning to stay in retail and want to remain close. JCPenney's is doing fairly well and they are based in Plano.

[EJC]

layoffs...

You are in my prayers. As others have said, keep the spirits up, that will help with finding the right opportunity.

[LRguy21]

Why doesn't the board just give the boot to the CEO? I think Dillards has so much potential! They just dont offer anything the consumer really wants or needs.

[bchris02]

Why doesn't the board just give the boot to the CEO? I think Dillards has so much potential! They just dont offer anything the consumer really wants or needs.

The class of stock the Dillard family owns makes it impossible to boot them. Thats why investors are trying to get them to sell that stock, but they will run it into the ground before they give up control.

And you're right...Dillard's doesn't have what the consumer wants or needs, especially in economic uncertainty like this. The reason they were lackluster even in good times is because they don't keep up with the trends, both in retail and in fashion. Many in the larger markets say Dillard's is conservative and behind trends compared to Macy's.

[LRguy21]

The class of stock the Dillard family owns makes it impossible to boot them. Thats why investors are trying to get them to sell that stock, but they will run it into the ground before they give up control.

And you're right...Dillard's doesn't have what the consumer wants or needs, especially in economic uncertainty like this. The reason they were lackluster even in good times is because they don't keep up with the trends, both in retail and in fashion. Many in the larger markets say Dillard's is conservative and behind trends compared to Macy's.

EXACTLY!!!!!!! Lets say that we weren

[theman]

I would say our lives after 9/11 don't hold a candle to what I've been through the past 3 months. Going to work everyday knowing your job is hanging by a thread, knowing layoffs are certain just not when they will happen, is not a fun way to live. The writing has been on the wall for Dillard's for a long time. As I said, they were doing very mediocre when the economy was good - they are in no position to survive a recession of this magnitude.

Part of me wants to stay in Little Rock because I have grown to like the town, but I will probably end up in NWA or out of state. Little Rock is losing a huge chunk of its white colar job base. There is job growth in manufacturing, but this wont replace what is being lost. Makes me sad because LR was on the edge of really becoming something. I think the exodus of the white collar job base will only make the crime problems worse and should bring much of the growth LR has seen over the past 5 years to a halt.

I'm sorry to hear about the loss of your job. I know what you are going through because I was downsized from my previous job a couple of years ago. You're right when you say that it is not good going to work everyday knowing that uncertainty about your job is the number one thing on your mind. I was blessed to find a better job and was able to stay in Little Rock. Hopefully the same thing will happen to you and if not here then in NWA or out of state.

The things that are happening to companies and jobs here are happening all around the country. Just because many white collar jobs are leaving doesn't mean that the crime rate is going to go up or that the growth is going to stop. Little Rock has landed many manufacturers that are making Little Rock their national hq, so there will be some white collar jobs there (not enough to offset the layoffs at Dillards and what is expected at Alltel, but some white collar jobs none the less). Many blue collar jobs will be created which is important as well. This may keep down the crime rate because jobs will be available. Also HP is going to hire 400 to start its call center at the Metropolitan Bank Tower downtown until their building is finished in Conway where they plan to hire up to 1200. Those are $40,000 per year jobs and in central Arkansas that's good money.

The current economic situation is taking its toll on many industries and geographic regions. Even NWA has seen a slowdown in job growth and retail closings. Many restaurants have closed and Circuit City in Fayetteville is scheduled to be closed. No one is saying the sky is falling in the northwest part of the state and it is not in central Arkansas.

We hate to see the changes in our home grown companies. Alltel being swallowed by Verizon was bound to happen. With the communications industry going through a consolidation phase, it was just a matter of time. Now there will be four huge wirless companies (Verizon, AT&T, Sprint/Nextel and T-Mobile) and a bunch of smaller guys. Acxiom seems to have stabilized and made a recent aquistion. We still have Stephens which seems to not be affected as much as other investment banks during this economic mess and Windstream as well.

Dillard's has been run into the ground. Since their father died, Dillard's doesn't seem to know what direction it is going. They seemed more concerned with keeping their jobs than impoving the stock price for the shareholders. With the current economy no one would buy Dillard's if they could. With the family controlling most of the class B shares they basically control the company. I read somewhere that some of the other stockholders my sue for fiduciary irresponsibility. I don't know if that would help or not.

Good luck and God Bless.

[LRguy21]

Too bad I didn't buy Dillard's Shares at $2.50 a share in 08, its been closing in the mid $30 rage. Way to go Dillards! Keep up the good work. Now please upgrade the LR store so we can have a real hometown Flagship store.