Don't judge a handbag by its share price
But financial journalists who simply go on the obvious don't know CEO Ross Lane and his dad Robert. They are uncommonly clever people.
Ross appeared to roll over, paws up, when he was virtually accused of unskilful management.
The share price was around $1.20 in July - about two dollars down on its peak in 2003. Misery abounds. Marcs winter range of blokes' shirts was attacked by the purple plague, and the blokes didn't like it, resulting in purple stock that can only be jobbed out to the British royal family. Morrissy, which seldom seems to have a good season, was under- performing as usual and the little Polo man found his horse had developed a worrying limp.
While Ross promises he will try to do better, he hints that he may listen to a sale proposition if one came along.
That's how it appears. But look under the rocks. Everybody knows that OrotonGroup paid unbelievably too much for Marcs ($22 million) and then proceeded to stuff it up anyway. However, the company still has an asset that can be made to work. Polo is marketed in Australia under a licence which is subject to non-renewal if the Polo people want. But as it stands Polo is also a brand that could be shone up with some more exciting styling and better pricing. The core brand, Oroton, is still a strong handbag and accessory performer and is joined at the hip to the Lanes. Morrissey could also be developed further as a designer brand but is currently languishing.
It is the non-harvesting of OrotonGroup's potential that is devouring its share price, not the assets themselves. Remembering that the Lanes still hold 53 per cent of the shares, if you do the equation of a poor share price and a willing buyer, that winning buyer could well turn out to be the Lane family. Any other buyer of the publicly held shares would find themselves in bed with the Lanes - who'd have most of the blanket on their side.
If my highly speculative possibility comes to pass, the company's current performance will make an interesting retrospective.
Pretty Girl for a pretty penny
While the Pretty Girl Fashion Group has grown into a major player in the retail/wholesale garment industry in Australia, and is presumably performing well, it wouldn't surprise me if it were a takeover target, but for quite different reasons to the company above.
Jeff Moss runs this whopper outfit which comprises more than 400 stores along with the brands Rockmans, BeMe, Table Eight, Wombat and PG Corporate.
Jeff and family have 50 per cent of this conglomerate while James Packer and his family have the other 50 per cent. And while Jeff no doubt likes having Australia's richest man as his partner, he probably wonders how well schmuttas fits with casinos and media. I'd guess not very well, especially if you consider capital invested against profit that comes forth from fashion as compared other investments. If James agrees with my summation, (he probably won't call me to see what I think) then the whole box and dice might be buyable. It would be doubtful if the families would sell off pieces, since that would not suit their all or nothing philosophy.
Rumour has it that there have been a couple of approaches but how serious nobody is saying. Because Pretty Girl is a private company news can be strangled at birth. But if we look at possible contenders we might come upon Noni B, the current champion of a genre that I call Budget with Bite. Moss family friend Solly Lew might have a look but he's currently got out the bellows for the Just Group in which he has a substantial interest.
Then there is left field - the place from whence came Newbridge to buy Myer at a lovely (to the Coles Myer board) price.
Jeff Moss is an amiable young man of unswollen head (which is more than I can say for some of his contemporaries) sitting in a lovely seat. If there is no sale he goes on running the Pretty juggernaught and if there is a sale he gets to play with the extremely Pretty money.
And speaking of neither, Jeff and wife Lisa have produced twin Mosses: Solomon and Sofia. By the time I'm consigned to my rocking chair and tartan rug, these two will probably be schmutta movers and shakers. S & S Moss has a nice ring to it, although there might be fights at the mail box when the postie calls.