Whats on Rod Duke's shopping list?

So Rod Duke and his Briscoe Group [BGR.NZ] have again expressed an interest in buying retailers in New Zealand.

I wrote a few months back about Duke's great pile of cash and it seems he has ideas burning a whole in his wallet as well.

He has been buying up a bigger share of Pumpkin Patch for his personal portfolio over the last year or so as the share price got cheaper but just what the hell has he got his eyes on?

He has NZ$62 million cash to play with.

Let me have a bit of a stab in the dark and tell you why.

Please keep in mind that I own shares in a large number of listed New Zealand retailers!


My Shopping List

Briscoe Group [BGR.NZ] The stock price is low, the company doing well and has no debt. Why wouldn't you buy back shares in your own company while they are low. Pumpkin Patch has been doing just that.

Pumpkin Patch Ltd [PPL.NZ] Duke already has a 10% stake in this company and so does a potential competitor of his for retail buys, Jan Cameron. Nevertheless he has built up his personal stake over time and it would be a coup to be able to manage this prestigious international brand.

Postie Plus Group [PPG.NZ] Struggling a bit in the past, they are doing allot better over recent times with higher sales and better margins. Their very low share price makes them a target for takeover and at less than NZ$15 million market cap Duke could swallow this company whole without batting an eyelid. They have a retail brand in Baby City that would be quite attractive to any retailer. The only major stumbling block is that Jan Cameron, the wiz retailer, who loves to buy distressed retailers owns 15% of the company.

Tasman Pacific Food Group The owner operator of Burger King in New Zealand and Australia, it has been struggling for years under competition from McDonald's and recently sold off its Hell Pizza brand for a loss. Vulnerable to a decent bid.

Burger Fuel WorldWide [BFW.NZ] A gourmet burger maker with 30 or so outlets, its NZ$16 million odd market cap makes it vulnerable. It has never made money and will continue to struggle to do so. Sales are suffering in the current recession. It will need additional capital to continue and a cornerstone shareholder such as Duke would be perfect.

Hallenstein Glasson Group [HLG.NZ] Like any retailer Hallenstein Glasson is suffering lower sales and lower margins. It is doing better than most clothing retailers but is vulnerable over the slow winter sales period.

Michael Hill International [MHI.NZ] This well run jewelry chain with over 200 outlets in 4 different markets is suffering a downturn from shoppers shunning discretionary sales and its share price is vulnerably low. There are many other Jewelry chains of various sizes in New Zealand that are similarly good targets for Duke's cash pot.

The electronics sector is going to consolidate during this year or next. Every retailer in that sector is suffering extremely badly and various chains are going to go to the wall in the next year or two.

Bad retailers who have high debt, high stock levels, poor locations and high operating costs are going to come under pressure the most. Even good retailers will be vulnerable if the retail slowdown continues for any great length.

Duke's advantage now comes because he and his Briscoe Group first had no debt and then reacted to the recession about a year ago by running down inventories and cutting those aforementioned and all important operating costs- it also helps that his stores are not inside Westfield Malls, they charge very high rents!

This gives him a big advantage over retailers like MHI, HLG, The Warehouse Group [WHS.NZ] and many other retailers Duke might have his eyes on because it is a major cost for any retailer and is often the difference between retail life and death.

I cant wait to see what will be in his shopping trolley.


Disc I own BGR, WHS, PPG, PPL, HLG and MHI shares


Briscoe Group @ Share Investor

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VIDEO: Construction of the World Trade Center & Freedom Tower

I remember distinctly when I first saw the twin towers. I was about 11 years old and it was the pan shot across the Hudson towards Manhattan in the opening sequence of Barney Miller.

The image of two massive slivers of silver sticking up proudly and with ultimate defiance to everything around them will stay with me forever.

As an 11 year old those buildings seemed to defy gravity and commonsense, how come they are so big, why are they so big and how come they don't fall down and yes what would happen if a plane flew into them and of course how the hell did they build them?

Well I found a fantastic video made in 1983 from the Port Authority of New York and New Jersey of the construction of the World Trade Center.

Here are a few facts about the World Trade Center:

1. The WTC opened in 1970 after 8 years of construction.

2. The WTC was the dream of David Rockefeller, chairman of the Chase Manhattan Bank, and Nelson Rockefeller, former Governor of New York.

3. The Rockefellers wanted to name the towers after themselves, but the mayor of NY, John Lindsay, insisted on the World Trade Center.

4. The City chose to build the WTC instead of building a new tunnel and large bridge over the Hudson River.

5. The World Trade Center was designed by architect Minoura Yamasaki.

6. According to Yamasaki, downtown Manhattan was the perfect place to erect the towers because there wasn't "a single building worth saving in the neighborhood."

7. Owners of nearby buildings disagreed, and delayed demolition by three weeks with their protests.

8. Sixteen blocks were cleared to house the completed WTC.

9. More than 10,000 workers involved in building the complex.

10. More than 60 of them died during construction.

11. The excavation work displaced enough soil to create Liberty Park, where four 60-floor towers and four apartment buildings were constructed.

***
Please note "Fact 11" is disputed - YT member "opusbeme" claims it should read Battery Park City !!
***

12. The WTC's foundations were laid at 60 feet below ground level.

13. The complex covered 16 acres when finished.

14. In addition to the towers, five other office buildings made up the WTC complex
The WTC had 12 million square feet of space.

15. Each floor was 50,000 square feet.

16. The buildings had their own ZIP codes - 10047 and 10048.

17. The towers were designed to look like a futuristic sculpture.

18. The structure was revolutionary. Its main supports were external, lining the four corners of each tower.

19. Critics condemned the completed buildings as "boring."

20. Completed, the buildings were 100 feet taller then the Empire State building. 

As 43 year old I am also absolutely fascinated by the construction of the Freedom Tower, the monolith replacing the WTC and something I have dubbed the "middle finger".

Watch as the construction of this mother begins to rise.

I will be posting video as the construction of the tower progresses over the next 5 years or so. 

The Freedom Tower as fully finished, 1776 foot of magnificant steel glass and concrete.

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The World Trade Center (America's Landmarks and Monuments)by Tamara L. Britton  Buy new: $24.21 / Used from: $4.56 Usually ships in 24 hours

c Political Animal 2009