DSW Update

By | September 18, 2017

DSW hit my ‘challenged’ alert on a couple of points

  • my daughter visited a high-traffic store in Portland metro area looking for fall / winter shoes for our wonderful OR winter.  she reported back that the stock levels were terrible and she could not find a thing … selection was very low with empty shelves.  this could be a one-store issue or just a bad day, but i do not think that brick / mortar retailers can afford to not have selection for people when they actually walk in the store … a warning!
  • valuation while fair, seems to be begging for a Nordstrom-like M&A … i struggle to see the valuation too far north of $20/sh until there are a couple of solid quarters of performance
  • the downward risk seems higher than the upward reward over the short / intermediate term

I sold 50% of the position in my daughter’s account, and i sold short a small position in my trading account – which has a ‘way long term’ objective timeline.   If the price retreats below $17 again, it would be an interesting trade or opportunistic to add more to daughter’s account.

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