What’s in the room?

It is merely a reference to a modernised joke by the Groucho brothers. ‘Wow, is that a really large penis, or is there an elephant in the room?‘ This is the situation we face (and yes it was an elephant). The stage we see when we are confronted with: “The 240-year-old department store chain was valued at just £65m by the end of the day, after its shares fell by 21% amid reports that it was now being shunned by suppliers. It was the biggest one-day fall recorded by the retailer for more than a decade” (at https://www.theguardian.com/business/2018/nov/14/debenhams-shares-fall-by-21). There is a question forming in my mind, but I will refrain from voicing it for now. You see, we also see: “The sharp decline also came after very poor weekly sales figures released by John Lewis on Tuesday. The rival department store chain said fashion and home sales collapsed by more than 11% on 2017 levels last week“. This now leads us to the question ‘Hold on, Debenhams is impacted by the bad sales of a competitor?‘ and that is not the worst. John Lewis is doing the British thing and blaming the weather though ‘John Lewis blames weather for clothing and homeware slump‘ they are all in an ‘I am so upset mode‘ due to: “The poor clothing figures came despite the employee-owned chain’s recent investment in its womenswear ranges, including the 300-piece John Lewis & Partners collection“. Debenhams reported more bad news in the recent past and they are all signals and symptoms of another problem. Yet the issue of that problem is not the actual problem, it is actually seen through “The move comes just weeks after credit ratings agency Moody’s downgraded its long-term outlook for Debenhams and increased its “probability of default” rating, which assesses how likely it is that the company will be unable to pay some or all of its debts“. It is not Debenhams, it is Moody’s that is part of the problem and there should be some consideration whether we should look at orchestration here. From my personal view there are two elements. One is actually Debenhams; the other is Moody’s as well as the analysts that they have.

Painting the frame of an empty picture

To get that, we need to look at the larger picture and therefor look at the frame of it all. There are plenty of people who have a job, yet their living expenses are high, and in winter even higher. Now we get the more important part in all this, which is: ‘This is not news!’ And that revelation puts Moody’s in part of the frame. In this day and age, laces like Sydney and London, the cost of living is through the roof and people can only barely get by. In Sydney we also have Christmas coming and it is going to be summer here soon, so the Australian population is going with the Australian bikini (hat and panties), so women look even more amazing than ever before and the weather ensues that they are not cold, so no heating bill (optionally some air-conditioning expenses). In the UK it is the reversed and under these conditions KMart, Target and places alike are doing really nice, whilst places like John Lewis with their “300-piece John Lewis & Partners collection” will not get much traction until the boxing day sales when prices go down 30% or more, so any increased revenue expectations is close to insane in November (besides black Friday that is). Optionally December will be on par (at best), so there we see my reason for the suspicion of orchestration. More so when we see information like “Debenhams did not deny the reports, but a spokesman said: “Many suppliers don’t use credit insurance. Those that have used it historically are well aware of the current situation and work with retailers to manage things accordingly“. This now gives us two parts. The first is seen with: ‘Those that have used it historically are well aware of the current situation‘, so not only is it a known situation, it is known historically so making the 21% down an even larger no-no, because a predicted event is either calculated in, or it is a stage of orchestration as I personally see it. This implies that some players are overly confident in the previous cycle, whilst the known elements were already in place that this was highly unlikely to ever happen. This is an additional part in my personal suspicion of orchestration of the numbers and optionally by the numbers.

The other article on John Lewis (at https://www.theguardian.com/business/2018/nov/13/john-lewis-says-mild-weather-to-blame-for-clothing-sales-slump) gives us: “It was also a challenging week for homeware, which fell 11.2.% after a sluggish housing market hit demand for curtains and cushions. Technology fared better and, though sales were down by 2.8%, the department was bolstered by gadget launches such as the iPhone XR“, and at this point we see even more.

You see, when we see the household spend being down, why would anyone get curtains and cushions at their homeware, whilst they get a decent and much better deal at places like IKEA? That would have been my forecast and knowing that is also adamant to the stage where the previous estimation of certain vendors would have been too positive in advance, in addition, technology sales would have been overestimated if it was down, yet not as much by the iPhone XR, so that implies (from my point of view) that there was a clear overestimation in the first place, as well as an optional overestimation of the new iPhone which by the way is at least 17% too expensive from the get go. Knowing these elements and you can see them in your own personal environment the best, you know that most of you are a little more cautious because of upcoming Christmas, all that implies that the organisations like Moody’s have been loading their cannons for another reason, because the entire cost of living is out of whack and it seems that it can now be used for optional economic orchestration, which is a huge no-no in my books. In addition, we see this downfall whilst the Black Friday has not started yet, a black Friday that could impact sales extremely positive as some see Debenhams (optionally John Lewis too) as the place to be on such a day. Consider that last year (according to the Express) ‘Debenhams offered up to 70 percent off on certain goods. Calvin Klein clothes were discounted by 50 percent‘, so when we see that, can we expect that these places were shunned last month so that the people could buy a lot more bargains? When you know that there is a chance that articles will be priced sown by 70%, would you shop now, or wait for an optional 70% cheaper pair of jeans (and if the man is lucky, his girlfriend will stock up on lingerie on that day too). All elements that are close to given, so when we see a 21% downfall on given expectations, whilst we see that certain elements are not considered in the first place, it is my believe that there is a setting of orchestration, which can have far reaching effects, especially as certain players with openly pressuring anti-Brexit feelings should no longer be ever trusted, not as they are trying to sway people through fear mongering. That is a personal believe of mine and so far I have been proven correct in more than one way ad on more than one occasion.

Let’s be clear, we need places like Fitch and Moody’s, yet when we see that certain known factors are downplayed by  analysts and when we see that they are not held accountable in any way, we see a power vacuum, where people unelected and optionally non-qualified are setting a dangerous stage for corporations to be scrutinised on a few counts where there was a seemingly level of neglect on applied business intelligence, at what point will we see the open questions on how the curve was overly downgraded at a prearranged point? If Debenhams and John Lewis get to hit the ball out of the part on the coming weekend and we see overly good news on the week after, will we start asking the questions on how analysts are optionally intentionally fear mongering companies into some level of administration? My views are supported by Springboard. The Guardian gives us: “The most recent data from Springboard, which counts shopper numbers, showed high street footfall down 2% in October – the 11th consecutive month of decline. Its analysts suggested shoppers were waiting for Black Friday and other seasonal promotions“. When we see that view and we do see that there has been a drop and the drop can be explained in simple and logical ways, at that point we see that there is an urgent need for Moody’s to explain their actions and give us jerk-knee actions like lowering the forecast for well over a fifth of the value, whilst the known status for the UK has been that Christmas tends to be a decent time, especially as there is no Thanksgiving outside of the US (for the most).

It seems to me that analysts and credit agencies like Fitch and Moody’s are becoming the elephant in the room and their actions should be the beginning of a lot of questions, especially as there are still too much questions on how they were in denial for too long in the 2008 bank and housing issues. It seems that they have been given a pass for too long and it is time to address that, especially as the US has been deploying whatever they can to avert Brexit into a remain status, they do not like to lose their upgraded revenue at the exploitation of Europe any day soon and that has come under fire to a much larger degree, and it should be receiving a lot more scrutiny by all levels of media soon enough (actually,  they are already a year late on that too).

At some point serious people should address the elephant in the room. I am hereby voicing clearly that I might be completely wrong, yet I am asking questions, ready to be corrected. The facts are clearly shown that some actions are overly excessive, especially in light of certain parts shown out there, the Debenhams situation is not new, there are pressures and no one denies that, yet they are not new. There are clear indicators that this has been a longstanding issue, a longstanding status of consumers not having enough available to splurge in any real sense of the way, making the entire 21% drop questionable on many levels and we do not see the questions asked, more so the drop is just accepted as is, which is another issue as well. We can clearly ask John Lewis a certain amount of questions that link the words ‘sanity’ and ‘reasoning’ on their ‘300-piece John Lewis & Partners collection‘. When was that done? Was it ever done? When we see the mention of ‘The line, which will be available in sizes 8-20 and available at prices ranging from £10 for a cotton jersey tank to £250 for a cashmere coat‘, yet I see no information on where the mean, the median is and how many pieces are at the outliers of that 300 piece range, is that not an important part as well? You see if 45%-65% is between the lowest and the -1 median John Lewis really arranged for a good time for themselves, if more than 40% is higher than the mean, we see that their insight was poor, with the optional ‘utterly stupid’ label if 30% is between Median +1 and highest priced articles, especially in this economic climate. Did anyone look at that? I am asking, because I searched, but I did not find that information. I am willing to accept that I did not look everywhere and in the wrong places, but Google search is pretty good that way. So as that part is optionally missing, the question I had on analysts, forecasters and prognosticators is setting them in a not so good light, especially as this data would have been available pre-launch (consider that these catalogues needed months to be created and printed).

These are all elements that were available way ahead of a sudden drop in values. Now, in the case of John Lewis, there is a chance that the fashion was initially rejected (until Black Friday) but that too could have been accounted for ahead of time. This all gives additional value to the question: ‘What is in the room?‘ So what if it was not an elephant, but merely an overextended ego? How would we see the status that Moody’s, Fitch and others are giving certain UK retail downgrades ahead of the curve?

I wonder if we will see the questions come after Black Friday and in January 2019, but I am not getting my hopes up, not any day soon at present.

 

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