Taking Aim at Hardlines: Want to buy a looser?

Friday, August 13, 2004

Want to buy a looser?

Yesterday the news reported that Toys-R-Us wants to get out of the toy business and concentrate on baby merchandise because they aren't making any money on toys. It seems that Wal-Mart is too much competition for them. This is really strange as it makes you wonder why they think they can be any better at baby merchandise if Wal-Mart and Target are going after that market as well. Even the announcement causes one to pause and ask, "Why would someone want to buy a looser and go through the same thing Toys-R-Us is currently experiencing?" Certainly, if they want to sell, it would make more sense to find a way to put some lipstick on the pig and make it more attractive to prospective buyers.
As I was thinking about Toys-R-Us, my mind raced ahead to thinking about the power tool industry. TTI has become the Wal-Mart of the power tool manufacturing industry. Pentair put some lipstick on their Tool Group and sold it to Black & Decker. Meanwhile Atlas-Copco is trying to sell their power tool companies including Milwaukee Electric Tool Company. While no one has actually said it, could it be that Pentair and Atlas-Copco weren't making a decent return on power tools and decided to sell out without telling the world why like Toys-R-Us did?

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