11-12-2008
07:15 AM
3 Loves
For the people who are saying that Southwest should fly their own metal to Canada and Mexico. You are NUTS!!! With the economy in the dumps right now. It would be a BIG mistake to try this right now. I'm no CEO or anything close but, I have worked in retail my entire life. In the 90's I used to work at a Midwest retailer called Venture stores Inc. We had approx 100 in 7 states with the majority in MO, IN, and IL. The company tried to expand well past their operating capacity. They went full steam into Texas with approx 25 new stores in 2 years. The following is copied from Wikipedia.
By the late 1990s, the chain found that it was unable to compete against other retail chains, such as Wal-Mart, Target, and Kmart. Venture tried to return to its founding principles as an upscale discounter and remodeled most of its 90+ stores. While facing vast competition Venture made a fatal mistake trying to expand into Texas instead of protecting its core markets. Venture sold the Texas stores to Kmart in 1996 and closed its distribution center in Corsicana, Texas. The company entered Chapter 11 bankruptcy on January 20, 1998, and tried to operate with a smaller number of stores. The effort was not successful, and the company announced its closing on April 27, 1998. Most of the former Venture buildings were absorbed into other chains, such as Kmart, Kohl's, ShopKo, and Burlington Coat Factory.
Now with that said. Does any employee want to over expand and end up in financial trouble?
Lets just say SWA did fly their own metal into these two countries and failed. In order to not layoff any employees (even after 9/11 they NEVER laid off a single employee) they decided to eliminate the FREE airfare and instead charge $25 for a round trip flight. How would you feel then???? And to the others that are blaming Gary Keller on the drop in the LUV stock. That is completely outrageous. EVERY stock is down right now. The last thing you would want to do right now is to sell your stock because you already absorbed the loss and when the stock climbs back up you'll be out of luck. Get your heads out of the toilet and realize that this is the best way to test the market with little consequence if it doesn't work.
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