Steve Kernkraut Quotations

We're in a marketplace where any kind of negative signal worries people. The same way some of the tech companies caused a ripple, I think investors hear Lowe's issue a warning, hear what's going on with one of the great players in the sector, and they get nervous.

Most stores are filled with polar fleece and sweaters, but in 85-degree heat when people are wearing shorts, it's hard to sell those items.

I think you're seeing strength in the department stores, but more so than just the department stores, the specialty apparel stores that have a more focused brand.

I think it was a realistic, pragmatic view of what the strengths and weaknesses of the company are. He didn't break new ground with the initiatives, but directionally I think he set the stage for change, and I think by March or April of next year we'll see a change.

I think they made a lot of fashion changes, but there's been a general malaise in women's fashion apparel. What's somewhat concerning here is that Nordstrom has transitioned totally to fall earlier. Is their fashion not on target, or is the consumer really concerned about the rising gas prices?

I think they're only in the first or second inning of a turnaround. They've done a miraculous job, but I think there's much more to come.

I think the retail sector is a great sector to buy because they don't have any of these Asian flu syndrome. I mean, all the things that are happening in Asia right now are positive to retailers because a lot of these retailers -- their cost will go down and they'll be able to bring goods into the United States at a lower...cost basis.

I think this is a good move, the right move to make.

The expectation is that it's going to be a very disappointing season. Business never materialized, and when it did, it was right around Christmas. It was too little, too late, and I think it became way too promotional.

The September numbers were generally on track, there were pockets of strength and there were some weaknesses. The numbers overall were not horrendous, but overall certainly the outlook could have more of a negative backlash from the higher oil prices.

Thanksgiving weekend was strong and that lifted a lot of the retailers' results. I think they have momentum going into the holiday season.

Any business they do on the Internet is going to be very profitable for them. They have the infrastructure. They don't have to create it. And additionally, the profit margins on their bras and underwear and lingerie are spectacular, while the other e-commerce companies have very narrow margins.

Alan is a proven winner in every business he's been involved in. He's turned around Sears credit, he's taken charge of their Internet business and given it life, and he's been able to reorganize their home-services business. Probably the best part about him is he's coming into his position as CEO and he understands how CEOs work, but he doesn't have the emotional bias. He can make a kind of fair assessment about what the customer likes and what he doesn't.

They must do something that's going to leverage traffic in the mall. They can't get totally away from fashion. They've got to come up with something else whether its making the jewelry area bigger or making the denim area bigger.

They reported much better earnings than we suspected. It was all based on Fingerhut being better than plan. Department stores were actually below plan, so the quality of that (earnings) improvement reflects better delinquency rates than anticipated.

It really is very weather-sensitive. You've got to psych the consumer into thinking the fall is coming. And the season is longer because kids wait to see what other kids are wearing.

It's going to shape up to be a real messy Christmas season. It's very hard to read. Some companies had a very strong Thanksgiving weekend, others weak.

The numbers that came out were surprisingly strong. You have to walk away impressed with what they've been able to do in a short amount of time.

The consumer in America is just spending and they're spending with abandon. It's very hard to find a pocket . . . where the consumer is not spending.

I'm optimistic that there has been some uplift to business trends.

I really want to hear him say how he's going to energize Sears. I want to hear what he's going to do differently. I want to hear him say how aggressively he's going to grow Great Indoors and how he's going to get women to come into the store.

The early November period was rather sluggish but the good news is that the Thanksgiving weekend was superb and that really set the momentum for the holiday season.