The Discount Variety Stores — 10X Opportunities in the Last Decade and Continuous 10X Trends
Everyone loves a bargain and this is an apparent trend globally. E-commerce has never dampened the retail stores expanding footprint and sales and profits.
Dollar General 2010–2019 20 to 120 dollars or 6X return.
Dollar Tree 10–110: 11X Opportunity
Dollar Tree stock price merely followed the overall revenue per share of the company. With revenues growing from a mere 1 dollar per share to 96 dollar per share, truly this stock has grown into a 100X opportunity in the last 30 years with nothing but fundamentals. Even at current price of 100 dollars, the company trades at a P/E ratio of 13X. When you grow your revenues, earnings, the stock merely catches up with your well-managed company.
Ross Stores 5 to 100 or 20X Opportunity
Pan Pacific Holdings (Don Quixote of Japan) — 1000 to 7000 or 7X Opportunity — And Likely More Beautiful Things to Come —
***
I will dissect to you this powerful stock which we all love. Pan Pacific Holdings. Ticker 7532 in Japan.
First and foremost, the key to a stock that you buy and hold forever is unprecedented and very predictable earnings growth trajectory.
Don Quijote is a very well-run company. It has grown its sales to 1 trillion yen earnings 50 Bil yen. 29 straight years of unbroken sales and profit growth.
Not your typical beast, Japanese discount emporium Don Quijote, popularly known as “Donki,” is set to be turned loose in Southeast Asia. Don Quijote Holdings, which operates the chain of raucous, neon-lit stores brimming with goods, has selected Singapore as the site of its first store in the region, with more to come.
Growth will continue rising as the company is planning to invade the entire Southeast Asia and concentrate increasing sales by acquiring companies in Japan. As they say the best form of flattery is to copy your strategy, Don Quixote has been copied by a South Korean discount store with the same strategy of quirky entertainment while selling different products at affordable prices. We are talking 3.7% net margin but Trillion in Sales. Thats the magic of Don Quixote.
Don Quijote, a popular Japanese discount chain store, is opening its first South-east Asian outpost in Singapore’s Orchard area. (Author’s note — They opened Dec 1 2017)
Known for selling a wide variety of goods at bargain prices — from pharmaceuticals, cosmetics, groceries, to electronics and unique lifestyle items, news of its opening has raised our hopes for a new eclectic shopping experience.
The store stocks costumes which harks to Japan’s cosplay culture, ranging from funny to the downright bizarre.
Quirky Mascot Sells Well :D
Online shopping and delivery service
For those who can’t wait for the brick-and-mortar store to open, Don Quijote also offers an online shopping service with international shipping on their website, where you can browse a selection of items that are stocked in their stores.
From 2005–2019, the company’s net income went from 7B Yen to 37B Yen on the back of a 500% increase in sales from 232Bil sales to 1 Tril Sales.
This is a very very important HIGHLIGHT in the annual report of Don Quixote. Family Mart will invade in TAIWAN. Combined Strength of Don Quixote + Family Mart + Itochu. 3 big giants. The trillion yen club award.
Very Important:
Birth of group with sales of JPY4.7tn
The result will be a group with total sales of JPY4.7tn operating in three formats: general merchandise stores (GMS), discount stores, and convenience stores (Uny JPY670.6bn [FY02/18; direct sales excluding tenant revenue and other operating revenue] and Don Quijote JPY941.5bn, totaling JPY1.6tn; fourth largest domestic retailer).
President Ohara stated, “Our intention is to ride over the rough waves coming to the distribution industry through mutual organic integration.” He added that the name change reflected the company’s commitment to creating a retail format that can be recognized globally. President Takayanagi of FU-HD commented, “We would like to expand overseas together, such as bringing the Donki format into Taiwan through FamilyMart. We want to mobilize the combined strengths of the group, including Itochu, to reach a new strength,” and, “The meaning of acquiring 20% of Don Quijote Holdings is that although we will give up our shareholding (60%) in Uny, we can be comfortable in continuing to hold 20% of Uny by acquiring 20% of Don Quijote Holdings.”
THAT’S ENTERTAINMENT
Shoppers at Donki are welcomed by tanks of exotic fish before they enter a maze-like warren piled high with goods ranging from face-massaging gadgets to oversized bags of potato chips.What feels like a pell-mell approach is actually a finely honed company strategy, the result of decades of experimentation in each store.
First-time customers often come away bewildered and humming the store’s unending earworm of a theme song, but return for more, drawn back by a constantly changing array of goods
Read more here:
Notable Wisdom:
Japanese discount retailer Don Quijote Holdings Co Ltd (7532.T) said it would be interested in buying Seiyu if Walmart Inc (WMT.N) puts the Japanese supermarket chain up for sale, as it expands its presence in the domestic market.
This comes after business daily Nikkei reported last month that the U.S. retail giant would offload its Japanese unit.
“If it came up for sale we would be interested and it is attractive,” Don Quijote Chief Executive Koji Ohara told a news briefing on Monday.
Walmart has struggled to replicate the success of its low-price model with Seiyu, which has more than 300 stores, and a sale would mark its latest exit from a low-growth market to shake up its overseas business and invest in places like China and India.
A Walmart spokesperson, however, said the retailer has not decided to sell Seiyu, is not in talks with prospective buyers and is continuing to develop the business, reiterating what the company had said after the Nikkei report.
Last week, Don Quijote reported its 29th straight year of sales and profit growth. The chain is targeting 500 stores in Japan by 2020 from 420 currently but has struggled to find sites in some areas.
“If you don’t have real estate you can’t do retailing. In addition to its human resources, Seiyu has many locations that you cannot get your hands on,” said Ohara.
More Information:
Japanese discount retailer Don Quijote Holdings Co Ltd (7532.T) was once the industry’s enfant terrible, overturning standard retail practices with its cluttered and chaotic stores that sell everything from faux leopard-skin rugs to designer watches. With sales projected to hit 1 trillion yen (£7 billion) this year, Donki is joining the top ranks of Japan’s heavyweight retail market, among the likes of Aeon Co Ltd , Uniqlo parent Fast Retailing Co Ltd (9983.T) and convenience store operator Seven & i Holdings Co Ltd (3382.T). The company says its success lies in its ability to amuse customers, who have tired of the efficient yet predictable shopping experiences at other Japanese stores.
May you be blessed and find your 10X Opportunities :)
