I assume they don't do consignment. They probably also don't do estate sales. So they're missing half of it. Most thrift store consumers are low income and consignment shops are more upper class. Its reflexive to call Goodwill when the parents die, but it's also equally reflexive now to call in a dealer, or just take it to Ebay. Consignment shops used to run high spreads, b/c knowledge of collectibles was spotty, but Ebay has leveled the field. I walk in a consignment shop they are on their smartphone immediately. You don't need proprietary knowledge to run a store, but you have to know your clientele. There is pecking order and thrift stores (like dollar stores) are the bottom. Remember when Goodwill used to pick up used furniture. Way too much supply, and the personal storage business is booming. I remember some elderly family friends who planned their retirement (in the 50s) buying Hummel figures. Today they sell at about what they paid for them.
The laughter reading that a company brags about "world class EBITDA" aka "World Class Made-up NON-GAAP Number" quickly fades moving through the piece. What begins in humor ends in a precarious and common affliction for so much of the "new" ideas today. Much of the story appears to rest on regulatory arbitrage around the profit/non-profit that one wonders about all the remaining claims about recycling etc. (emphasis on "appears", not alleging fraud). If this store didn't exist who would it hurt and who would it help? (honest question - thanks for any feedback!)
"In addition, Savers processed 985 million pounds of goods in 2022, up 44% since 2020. For the nine months ended last September, that number slipped by 2% from a year earlier. While slide is noteworthy in an industry that is supposed to be booming, it’s still up considerably.
With the amount processed is rising, it’s unclear why the payments to NPPs were revised lower. "
Function of OSD + Greendrop growing in % of total.
The slowdown in revenue growth isn't as catastrophic as you illustrated. Look at pre-covid figures and look at the impact on 2020/2021. More of a reversion to normalcy rather than it simply falling off a cliff.
No doubt the current multiples are a bit lofty, and the Ares stake looms as a big question market. The debt profile, as I've highlighted previously, is also a concern due to the high mix of variable rate etc. Nonetheless, it isn't hard to look at the current cap structure and envision how tackling current leverage, paired with modest SSSG + expo + cost rationalization has the potential juice equity returns. Core business, fundamentally, is not a bad one.
I was wondering how you would figure "EBITDA margin" considering that I have no idea how they figured EBITDA in the first place. And then I saw this, "Savers also discloses that “certain metrics presented in this prospectus, including the numbers of customers and NPPs and their donors, are based on market research, internally generated data, assumptions and estimates." (So, it may have been a guesstimate?)"
So, I assume that the numbers are probably "just a guess!"
Thank you for the research.
I assume they don't do consignment. They probably also don't do estate sales. So they're missing half of it. Most thrift store consumers are low income and consignment shops are more upper class. Its reflexive to call Goodwill when the parents die, but it's also equally reflexive now to call in a dealer, or just take it to Ebay. Consignment shops used to run high spreads, b/c knowledge of collectibles was spotty, but Ebay has leveled the field. I walk in a consignment shop they are on their smartphone immediately. You don't need proprietary knowledge to run a store, but you have to know your clientele. There is pecking order and thrift stores (like dollar stores) are the bottom. Remember when Goodwill used to pick up used furniture. Way too much supply, and the personal storage business is booming. I remember some elderly family friends who planned their retirement (in the 50s) buying Hummel figures. Today they sell at about what they paid for them.
No I don't believe SVV does consignment, nor do they need to as the goods they sell in their retail stores and to the wholesale channel are donated.
The laughter reading that a company brags about "world class EBITDA" aka "World Class Made-up NON-GAAP Number" quickly fades moving through the piece. What begins in humor ends in a precarious and common affliction for so much of the "new" ideas today. Much of the story appears to rest on regulatory arbitrage around the profit/non-profit that one wonders about all the remaining claims about recycling etc. (emphasis on "appears", not alleging fraud). If this store didn't exist who would it hurt and who would it help? (honest question - thanks for any feedback!)
Matt, as always you have a way with words.
thanks for the feedback - this article discusses the topic of who it helps/hurts - https://crosscut.com/news/2023/05/charity-or-business-some-consumers-still-confused-value-village...
9 of the 18 red flags are transition-based businesses. That explains some of the negative performance.
"In addition, Savers processed 985 million pounds of goods in 2022, up 44% since 2020. For the nine months ended last September, that number slipped by 2% from a year earlier. While slide is noteworthy in an industry that is supposed to be booming, it’s still up considerably.
With the amount processed is rising, it’s unclear why the payments to NPPs were revised lower. "
Function of OSD + Greendrop growing in % of total.
The slowdown in revenue growth isn't as catastrophic as you illustrated. Look at pre-covid figures and look at the impact on 2020/2021. More of a reversion to normalcy rather than it simply falling off a cliff.
No doubt the current multiples are a bit lofty, and the Ares stake looms as a big question market. The debt profile, as I've highlighted previously, is also a concern due to the high mix of variable rate etc. Nonetheless, it isn't hard to look at the current cap structure and envision how tackling current leverage, paired with modest SSSG + expo + cost rationalization has the potential juice equity returns. Core business, fundamentally, is not a bad one.
I was wondering how you would figure "EBITDA margin" considering that I have no idea how they figured EBITDA in the first place. And then I saw this, "Savers also discloses that “certain metrics presented in this prospectus, including the numbers of customers and NPPs and their donors, are based on market research, internally generated data, assumptions and estimates." (So, it may have been a guesstimate?)"
So, I assume that the numbers are probably "just a guess!"