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Posts: 32886
Location: Rhinelander, Wisconsin | Read about it! Look up KKR as well. Interesting choice.
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Posts: 8782
| There goes the neighborhood... |
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Location: Sawyer County, WI | "John Gillespie's Waters and Woods brought to you by Kohlberg Kravis Roberts" just doesn't have the same ring to it... |
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Posts: 13688
Location: minocqua, wi. | i remember them from their buyout of RJR Nabisco, DelMonte, Borden and Wise Foods Groups ... i've worked most of my life in the M&A World and "keeping things the same" is the spotlight shone into the field. the shots come later ...
increase EBITDA by cutting expenses and consolidating activities to quickly increase share-holder value ... to me it's the puzzie's way to run a P&L vs. growing revenue and increasing the top-line. they'll buy Mill's closest competitors either retail or catalog and meld them in (see Petco and Dr's Foster & Smith as a similar move) and eventually reduce the choices for consumers. they'll use their power and $$ to lobby against the SEC on market monopolies for the next purchase/consolidation by saying Walmart is a Competitor. the good news is, somebody might step in and start something else up too.
be a good time to buy Tractor Supply or Menards Stock ... my guess is one or both is "next".
Edited by jonnysled 1/6/2016 8:08 AM
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| Big fan of Fleet Farm but it was obvious over the last couple years at the two stores I shop the most that they were hurting for capital. Infrastructure was old and tired, parking lots falling apart. Capital is what KKR can bring to them and hopefully they can do it in a way that keeps the core business intact. I live in Rhinelander area and make the 45 minute drive to Antigo to shop at Fleet Farm at least once a month. When I lived in Fond du Lac, my kids said they were going to buy me a t-shirt that said "If I Can't get it at Fleet Farm, I don't Need It". Not completely true, because I wore suit and tie to work 9 months out of the year, but come summer and business casual, you can bet I bought my khakis from them.
Growing up in Wis. Rapids, I remember their original store in Marshfield.
KKR has a mixed record but they have revitalized some companies, such as Toys R Us. Without KKR, Toys R Us would be history. |
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Posts: 13688
Location: minocqua, wi. | one of my college room-mates built and started up the Antigo store ... it's an incredible store especially when compared to the older ones (like Wausau). hopefully they will shut down a lot of the smaller stores and build more of the newer, bigger stores. |
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| Sled, I agree Antigo is a great store. When we lived in Fond du Lac and had a cottage in Rhinelander, often would stop there on the way up, knowing they had a better selection than Fond du Lac. However, if you look at the store with a critical eye you will see that it is getting tired. It needs some investment. |
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Posts: 617
Location: Clintonville, WI | Sled gets up earlier than I, so he beat me to it. I will add that just focusing on organic top line growth must be balanced by solid cost management (NOT being cheap or cutting to the bone) because profit + cash = King, not just sales. So, he is right on in his references and what the plan for KKR should play out to be. They now have the platform to make more money. Read "Barbarians at the Gate". It's all about KKR and the legendary leveraged buyout battle for RJR Nabisco. I'm sure KKR has evolved since then, but they have always been and always will be about making more money.
I hope they try to keep as much of Fleet's "local charm" and terrific product set as possible. "If Fleet doesn't have it, you don't need it." My biggest concern is how KKR's influence will affect Fleet's approach/stance on firearms and ammo. That all remains to be seen, but I'm not going to hold my breath.
These things always open an opportunity(s) elsewhere......
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Posts: 13688
Location: minocqua, wi. | "Entrepreneurs grow trees and bear fruit ... Capital Markets and Private Equity Fund Managers squeeze the fruit and sell the juice ..." Sled
work with these guys a year or so and you won't wonder anymore how our Country got so screwed up ... |
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Location: Sawyer County, WI | jonnysled - 1/6/2016 9:44 AM
"Entrepreneurs grow trees and bear fruit ... Capital Markets and Private Equity Fund Managers squeeze the fruit and sell the juice ..." Sled
After over 20 years in investment banking, that is about the most succinct description I have ever seen.
Yes, it is and always will be about the money. |
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| Sled, without knowing the facts of Mills financials, one of the problems with family owned business is that sometimes family members are not committed to the business, want to cash out. Or, while the business is running, take too much out of the business instead of reinvesting. Large investment firms are not the only ones who screw things up.
I was very fortunate to spend the last 15 years of my career working for a family owned bank. We rode out the recession in far better shape than our competitors, with the reason being the family had always been conservative, plowed profits back into the company for decades, leaving us the best capitalized bank in the state. But, I have seen just the opposite as well, where family strips the profits and does not reinvest the way they should. |
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Location: oswego, il | There just isn't any new pie, just the existing once, growth means mergers and buyouts. Its happened in my line of work, three major players swallowed up everyone. Untill there is new pie, this is the future. |
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Posts: 13688
Location: minocqua, wi. | yah, i agree ... most family businesses don't make it to the third generation. the third generation was raised in the hay and the sun was always shining for them.
i worked for huge corp. coming out of school (3M and Mobil Chemical) then family owned companies and then Private Equity prior to going to work for myself. the safest place i've found is consulting to both. i live on a 5 legged stool now and work for myself and it's the most "secure" i've ever felt LOL, imagine that. i have a privately-held Chinese client, 1 privately held Honduran client, 1 privately held Indian client and 2 U.S. privately-held clients. the goal is they all stay private but as soon as we become successful and need the demon capital it all changes. the private owners work hard to fund themselves or seek out their own investors via relationships on the old adage that money knows money but if they get too big and start needing the really big money or if a generation isn't an integral part of the operations with the same motivation and principles then they usually sell.
my favorite guy is the guy in Rhinelander who we used to describe as a cross between John Wayne and John Wayne ... when asked why he built a plastics company in Rhinelander his answer was simply "because i live here". his goal was to provide jobs for the people of the community that he considered his friends and he led with a style that made everyone accountable to everyone. he still lives in the ranch home he bought when he was in his twenties and went out on his own after being fired by his employer for making paint in his garage ... he was making it and selling it to his high-school buddy Peter Menard from Eau Claire. we used to pride ourselves on if you came to our company you would never figure out who was who and who did what ... you might pick out the President cuz he was the oldest one of the 45 of us. #*^@, i miss that place ... his partners sold us out and since his son started a new company and i'm proud to have them as one of my clients.
if you work for a really good privately owned company, be thankful ... at least that's been my experience. we used to say "the good news is management will never change ... and the bad news is management will never change" ... LOL
Edited by jonnysled 1/6/2016 10:43 AM
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Posts: 8782
| I learned the hard way what venture capitalists do. Before the ink was dry my boss said "Well. It was a good ride. You'd be wise to start looking for another job. We'd ALL be wise to start looking for a job, because what just happened here will be the end of this company and what we do here."
It took several years, but he was right. Seen it a few times since then. Buy it, wreck it, squeeze every last drop of blood out of it, and leave the carcass rotting in the woods. |
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Location: varies | esoxaddict - 1/6/2016 11:06 AM
I learned the hard way what venture capitalists do. Before the ink was dry my boss said "Well. It was a good ride. You'd be wise to start looking for another job. We'd ALL be wise to start looking for a job, because what just happened here will be the end of this company and what we do here."
It took several years, but he was right. Seen it a few times since then. Buy it, wreck it, squeeze every last drop of blood out of it, and leave the carcass rotting in the woods.
On the bright side, the buying firms bigwigs got the latest Bentley model out of the deal.  |
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Location: Rhinelander, Wisconsin | jonnysled - 1/6/2016 10:39 AM
yah, i agree ... most family businesses don't make it to the third generation. the third generation was raised in the hay and the sun was always shining for them.
i worked for huge corp. coming out of school (3M and Mobil Chemical) then family owned companies and then Private Equity prior to going to work for myself. the safest place i've found is consulting to both. i live on a 5 legged stool now and work for myself and it's the most "secure" i've ever felt LOL, imagine that. i have a privately-held Chinese client, 1 privately held Honduran client, 1 privately held Indian client and 2 U.S. privately-held clients. the goal is they all stay private but as soon as we become successful and need the demon capital it all changes. the private owners work hard to fund themselves or seek out their own investors via relationships on the old adage that money knows money but if they get too big and start needing the really big money or if a generation isn't an integral part of the operations with the same motivation and principles then they usually sell.
my favorite guy is the guy in Rhinelander who we used to describe as a cross between John Wayne and John Wayne ... when asked why he built a plastics company in Rhinelander his answer was simply "because i live here". his goal was to provide jobs for the people of the community that he considered his friends and he led with a style that made everyone accountable to everyone. he still lives in the ranch home he bought when he was in his twenties and went out on his own after being fired by his employer for making paint in his garage ... he was making it and selling it to his high-school buddy Peter Menard from Eau Claire. we used to pride ourselves on if you came to our company you would never figure out who was who and who did what ... you might pick out the President cuz he was the oldest one of the 45 of us. #*^@, i miss that place ... his partners sold us out and since his son started a new company and i'm proud to have them as one of my clients.
if you work for a really good privately owned company, be thankful ... at least that's been my experience. we used to say "the good news is management will never change ... and the bad news is management will never change" ... LOL
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That's precisely why I work for me. When I shifted from sales management and promotion to forming a media company with Zach, it was a natural progression, and was right in our combined wheelhouse. We reinvest every penny available, and keep growing, which is as much an issue at times as anything else. The most difficult issue is finding good contractors for our field work one can trust, and the fact I tend to trust everyone far too much. I'm not a very effective personnel manager, that's for sure. Slamr has saved me from my self more than once.
Like sled said, 'the good news is and the bad news is management won't change', but I really like my job. Never had more fun working in my life, and I spent the majority as an independent sales/promotional rep.
I don't like the results I see when an investment group buys out a family owned business. I've seen what happens in the marine/fishing/hunting industries, and it's usually a bad thing for what the company 'stood for' when family owned, sometimes a good thing for the brand growth, and frequently a disaster.
$1.2 billion should support the family for a few years. |
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Posts: 859
Location: MN | This is the way of things these days. But if you look you can see the younger generations 20's and 30's are starting businesses and working for themselves. I just about passed out when I started musky fishing on purpose that most of the bait makers are small out of the house operations. Even the big guys aren't really that big in the great sense of business. |
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Posts: 8782
| rodbender - 1/6/2016 11:17 AM
esoxaddict - 1/6/2016 11:06 AM
I learned the hard way what venture capitalists do. Before the ink was dry my boss said "Well. It was a good ride. You'd be wise to start looking for another job. We'd ALL be wise to start looking for a job, because what just happened here will be the end of this company and what we do here."
It took several years, but he was right. Seen it a few times since then. Buy it, wreck it, squeeze every last drop of blood out of it, and leave the carcass rotting in the woods.
On the bright side, the buying firms bigwigs got the latest Bentley model out of the deal. :-O
It was more than that I suspect. They managed to run up $12m in debt before selling off bits and pieces of the company, while still collecting $500k salaries all along the way. I knew it was bad when we had to start submitting requests to HQ for approval to restock office supplies. Far cry from a few years earlier when I went to one of the directors with an ad for a $14k large format printer and said "Look at this thing! Man, that would be a cool piece of equipment!" Two weeks later the guys downstairs called me and said "Hey, there's a giant crate down here on the loading dock with your name on it." Got a 15% Christmas bonus that same year... |
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Posts: 13688
Location: minocqua, wi. | i find living with less and living below your means is even more valued when you work for yourself. it's almost like a reverse on what's important. seeing a safe horizon and looking at an odometer with >200k miles on it vs. having 4 years left of $5 or 600+ payments knowing you have to have that paycheck or you're screwed.
living like a rat in college was fun and it can be just as fun as an adult!! |
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Posts: 457
| I wonder if the brother Blain at Farm and Fleet is next? |
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| The $1.2 Billion being paid includes debt. Wonder how much debt the company had? That can sometimes lead privately held companies to put themselves up for sale. Company like Mills with a lot of prime real estate can accumulate a lot of debt and then one day realize debt service has gotten out of hand.
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Posts: 1144
Location: Minnesota. | Sounds like a couple of you fellows here have some REAL business acumen.
Big changes like this always make me skeptical but times change and so does the business climate. All we dos hope it might be beneficial to us all but...there wasn't much wrong with FF from where I sit. I liked what they offered and had what I needed at some decent pricing. Hope we don't lose that. Change is typically scary...
Reminds me of a sign on the city bus, going to high school in 1967-68...."Billy's ice-cold lemonade - $0.39 " ---"Suzy's ice cold lemonade, with a cherry, $0.39"...
:-)) |
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| The best thing about Fleet Farm for me is that they tend to have experienced employees that know where things are and are willing to help you locate what you need. The store in Fond du Lac is very cramped, not big store but tons of merchandise. You could ask anyone and they would know the aisle number it was in. |
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Location: varies | Any coverall retailer that sell Suicks to tractor tires is a good one imo.
not to mention, they sell quite a few products that are made in USA. I hope it doesn't turn into another China mart.
Edited by rodbender 1/6/2016 1:50 PM
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Posts: 859
Location: MN | I expect you will see an improvement in their online website, which in turn will require a more modern inventory system. Their website is far behind the times. I think they have some real opportunities in that regard. |
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