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By Alyce Lomax (TMF Lomax)
November 25, 2005
Another year, and another Black Friday is upon us, when many of us work off the excesses of Thanksgiving dinner through extreme shopping. However, investors who aren't out doing what some of us call "retail research" (ahem) at the malls today might be taking some quiet time to sip a gingerbread latte and muse about their holiday wishes.
For a change of pace, let's forget toys, baubles, clothes, and gadgets (or even publicly traded companies -- gasp!) and talk about a different kind of wish list -- private companies that might make great stocking stuffers, if they were ever to decide to go public.
1. Trader Joe's
Trader Joe's has a bit of a parallel with supernatural grocer powerhouse Whole Foods Market (Nasdaq: WFMI) when it comes to the inspiring wares on its shelves. However, TJ's (as it's fondly known) is small and it's funky; it describes itself as "a store of stories" and "a unique grocery store." Not only does it specialize in gourmet, decadent fare, but it also addresses important niches like organic and vegan markets.
By cutting out the middleman, Trader Joe's delivers the goodies at excellent prices -- who's not down with that? (Not to mention, that's an element that likely steals a lot of business from higher-priced rivals.) It's funky and eccentric, with its employees decked out in Hawaiian shirts. There are already more than 200 TJ's in 19 states across the U.S.
Since Trader Joe's is private, we can't really get an in-depth view of its financials. However, TJ's says on its website that it boasts more than 40 years of consistent growth and profitability, and it has funded its own expansion without debt. It touts its ability to keep costs low. From those initial clues, Trader Joe's sounds like a company that would be one heck of a treat in any investor's stocking.
2. Craigslist
If you believe the buzz, Craigslist is a great place to find anything and everything. With no marketing other than word of mouth, this barebones little operation was able to take the Internet by storm, with people across the country searching it for everything from jobs to dates to used goods, vintage or otherwise.
Craigslist, a sensation with a mere 18 employees, has been profitable for at least five years. It's big on keeping costs low; for example, it runs its site using open-source software that cost it not one penny. And if you're wondering about the power of Craig, the company's mission might have something to do with it -- its website extols many virtues, such as "giving each other a break, getting the word out about everyday, real-world stuff" and "restoring the human voice to the Internet, in a humane, non-commercial environment." (Case in point: the craigslist.org URL.)
Non-commercial or not, Motley Fool Stock Advisor recommendation eBay (Nasdaq: EBAY) bought a stake -- that giant obviously saw that there's something to this anti-corporate service. Craig sounds like a great addition to any holiday party.
3. SNOCAP
All right, some of us might look at Apple's (Nasdaq: AAPL) stock price today and say "Ouch." What about the emerging voices, though -- the new names that just may be poised to take advantage of trends in music?
So I'm mulling SNOCAP, the new brainchild from Shawn Fanning, that kid who brought us Napster (Nasdaq: NAPS) before it took down its pirate flag. Fanning's gone legit with SNOCAP, hoping to provide a service that will bring revenues from all sorts of channels -- the recording industry (it already has agreements with the four major labels), artists, retail stores, peer-to-peer (P2P) networks, and consumers. This company may, in effect, provide a one-stop solution in the expected migration away from digital piracy.
This may be the riskiest of these I-wish-I-could-have-a-piece-of-this-company treats, with the least amount of detail available as to what its business model is or will be, and the hardly insignificant fact that Mashboxx -- buying the Grokster name -- represents the company's only P2P customer to date (not to mention powerhouse Apple's iTunes is a big-time competitor). But it sounds like it might have the potential to be a real Rule Breaker. Stay tuned, Santa. This might make next year's list, if not a list for Christmas in July.
4. American Apparel
OK, so its founder's called by some, well, a bit risque (or so a few magazine articles have said), given sexy ad campaigns that feature real company employees instead of models. However, although in its infancy, here's another private company that really seems like it's firing on all cylinders.
American Apparel's first claim to fame was that it sold T-shirts -- simple, unbranded, well-made, unembellished T-shirts. It's not just simplicity and fit that has helped this company excel: American Apparel boasts goods sewn, sweatshop-free, here in the U.S. (That's something many retailers like Gap (NYSE: GPS) can't boast.) According to the information I've been able to dig up, workers earn an average of $12.50 per hour and are given massages at work, paid time off, health-care benefits, company-subsidized lunches, and free parking and free ESL classes.
You guessed it -- this is yet another company that's capitalizing off a decidedly anti-corporate, anti-**** sentiment that's popular with the young and urban hipsters. And it appears to be working. There were no American Apparel retail stores until October 2003 -- now there are 57 stores, with 29 in the U.S. It plans to have 100 stores by the end of this year and 1,000 stores by 2008. Sales thus far have nearly doubled or tripled every year since 2002 and are expected to exceed $250 million in 2005.
American Apparel may be the longest shot when it comes to filing to go public -- if you check its website, you'll see it's got a real independent, anti-establishment bent. Still, it's hard to ignore a company that mixes social consciousness with stunning sales, expansion, and operational efficiencies. American Apparel might just belong under the mistletoe.
'Tis the season ...
Investors always have a few private companies near and dear to their hearts that they wish would go public so they could have a piece of that action. Granted, a lot of times it never happens; many companies simply never need the cash (and that's exactly what a public offering entails, the means to generate cash by selling off stakes in its business).
But hey, it's the holidays, right? Dare to dream ... all of the companies mentioned here did.
Whole Foods Market and Gap are also Motley Fool Stock Advisor recommendations. To see what other companies David and Tom Gardner have highlighted over the years, take a 30-day free trial by clicking here.
Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.
November 25, 2005
Another year, and another Black Friday is upon us, when many of us work off the excesses of Thanksgiving dinner through extreme shopping. However, investors who aren't out doing what some of us call "retail research" (ahem) at the malls today might be taking some quiet time to sip a gingerbread latte and muse about their holiday wishes.
For a change of pace, let's forget toys, baubles, clothes, and gadgets (or even publicly traded companies -- gasp!) and talk about a different kind of wish list -- private companies that might make great stocking stuffers, if they were ever to decide to go public.
1. Trader Joe's
Trader Joe's has a bit of a parallel with supernatural grocer powerhouse Whole Foods Market (Nasdaq: WFMI) when it comes to the inspiring wares on its shelves. However, TJ's (as it's fondly known) is small and it's funky; it describes itself as "a store of stories" and "a unique grocery store." Not only does it specialize in gourmet, decadent fare, but it also addresses important niches like organic and vegan markets.
By cutting out the middleman, Trader Joe's delivers the goodies at excellent prices -- who's not down with that? (Not to mention, that's an element that likely steals a lot of business from higher-priced rivals.) It's funky and eccentric, with its employees decked out in Hawaiian shirts. There are already more than 200 TJ's in 19 states across the U.S.
Since Trader Joe's is private, we can't really get an in-depth view of its financials. However, TJ's says on its website that it boasts more than 40 years of consistent growth and profitability, and it has funded its own expansion without debt. It touts its ability to keep costs low. From those initial clues, Trader Joe's sounds like a company that would be one heck of a treat in any investor's stocking.
2. Craigslist
If you believe the buzz, Craigslist is a great place to find anything and everything. With no marketing other than word of mouth, this barebones little operation was able to take the Internet by storm, with people across the country searching it for everything from jobs to dates to used goods, vintage or otherwise.
Craigslist, a sensation with a mere 18 employees, has been profitable for at least five years. It's big on keeping costs low; for example, it runs its site using open-source software that cost it not one penny. And if you're wondering about the power of Craig, the company's mission might have something to do with it -- its website extols many virtues, such as "giving each other a break, getting the word out about everyday, real-world stuff" and "restoring the human voice to the Internet, in a humane, non-commercial environment." (Case in point: the craigslist.org URL.)
Non-commercial or not, Motley Fool Stock Advisor recommendation eBay (Nasdaq: EBAY) bought a stake -- that giant obviously saw that there's something to this anti-corporate service. Craig sounds like a great addition to any holiday party.
3. SNOCAP
All right, some of us might look at Apple's (Nasdaq: AAPL) stock price today and say "Ouch." What about the emerging voices, though -- the new names that just may be poised to take advantage of trends in music?
So I'm mulling SNOCAP, the new brainchild from Shawn Fanning, that kid who brought us Napster (Nasdaq: NAPS) before it took down its pirate flag. Fanning's gone legit with SNOCAP, hoping to provide a service that will bring revenues from all sorts of channels -- the recording industry (it already has agreements with the four major labels), artists, retail stores, peer-to-peer (P2P) networks, and consumers. This company may, in effect, provide a one-stop solution in the expected migration away from digital piracy.
This may be the riskiest of these I-wish-I-could-have-a-piece-of-this-company treats, with the least amount of detail available as to what its business model is or will be, and the hardly insignificant fact that Mashboxx -- buying the Grokster name -- represents the company's only P2P customer to date (not to mention powerhouse Apple's iTunes is a big-time competitor). But it sounds like it might have the potential to be a real Rule Breaker. Stay tuned, Santa. This might make next year's list, if not a list for Christmas in July.
4. American Apparel
OK, so its founder's called by some, well, a bit risque (or so a few magazine articles have said), given sexy ad campaigns that feature real company employees instead of models. However, although in its infancy, here's another private company that really seems like it's firing on all cylinders.
American Apparel's first claim to fame was that it sold T-shirts -- simple, unbranded, well-made, unembellished T-shirts. It's not just simplicity and fit that has helped this company excel: American Apparel boasts goods sewn, sweatshop-free, here in the U.S. (That's something many retailers like Gap (NYSE: GPS) can't boast.) According to the information I've been able to dig up, workers earn an average of $12.50 per hour and are given massages at work, paid time off, health-care benefits, company-subsidized lunches, and free parking and free ESL classes.
You guessed it -- this is yet another company that's capitalizing off a decidedly anti-corporate, anti-**** sentiment that's popular with the young and urban hipsters. And it appears to be working. There were no American Apparel retail stores until October 2003 -- now there are 57 stores, with 29 in the U.S. It plans to have 100 stores by the end of this year and 1,000 stores by 2008. Sales thus far have nearly doubled or tripled every year since 2002 and are expected to exceed $250 million in 2005.
American Apparel may be the longest shot when it comes to filing to go public -- if you check its website, you'll see it's got a real independent, anti-establishment bent. Still, it's hard to ignore a company that mixes social consciousness with stunning sales, expansion, and operational efficiencies. American Apparel might just belong under the mistletoe.
'Tis the season ...
Investors always have a few private companies near and dear to their hearts that they wish would go public so they could have a piece of that action. Granted, a lot of times it never happens; many companies simply never need the cash (and that's exactly what a public offering entails, the means to generate cash by selling off stakes in its business).
But hey, it's the holidays, right? Dare to dream ... all of the companies mentioned here did.
Whole Foods Market and Gap are also Motley Fool Stock Advisor recommendations. To see what other companies David and Tom Gardner have highlighted over the years, take a 30-day free trial by clicking here.
Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.
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