Today I will sell two stocks from the Growth Portfolio to make room for two new positions. First I will sell NQ Mobile (NQ). NQ is under scrutiny and the stock’s down. Perhaps it will come back, but its such a small position of mine I don’t feel I want to go into 2014 spending time researching and tracking this little stock. I don’t think NQ is going to be a huge franchise.
Francesca’s Holdings (FRAN) which has had two bad quarters in a row. When the company started lowering estimates, I stuck with the stock, because a turnaround would yield a high rate of return for my investors.
What Was Promoted
Today I throw in the towel on FRAN because I feel the styles they carry won’t sell. The company has a bunch of old-looking styles, nothing like the image the company tries to promote. Here’s a screen shot of FRAN’s website from around when I bought the stock:
Note the lovely ladies and the fresh styles.
What is Being Sold
Here’s what I found on the rack at a mall in Buffalo:
These styles aren’t good at all. This looks like a rack out of a thrift shop.
The store wasn’t even packed and this was the Christmas shopping season (a strong retail day too, the line at Express was so long I dropped my stuff and walked out after waiting ten minutes in line).
Here’s a look at Francesca’s during one of the busiest days of the shopping season:
Empty. The chain is also trying to promote its jewelry line, but look at those earings. I wouldn’t gift a girlfriend a set of those. They look plain and lack style.
Sharek’s Take
I think Francesca’s has lost its sense of style. Profit growth turned negative last quarter and I think the company has to have an inventory clearance sale to empty the stores and get some fresh items in. I’m selling every share of FRAN today.
