>Consumer roundtable with Alan Lacy former CEO of Sears

March 2, 2010

>talked about trends in retail where Alan feels unemployment may be affected by labor hiring instead of capital spending due to the uncertainty of the economy. Other issues in retail emphasized including a continued movement of private label share growth and distribution impact caused by this, as many products will have new channels available via quality and price level differentiation. On Consumer staples and Consumer discretionary products in general he is bullish, as home improvement and automotive cycles he believes can not be deferred much longer for replacement goods, but also because appliance makers in particular have been somewhat successful in creating proactive purchasing driven by water and energy savings and improvements in cleaning capabilities in particular for laundry appliances. In the interest of conservation, there is an offset to the change of behavior with debt use by the consumer.
Lot of discussion with Sears, Kohls, JC Penney and other names in space. Call me for insight and detail. Kmart generating cash while Sears living off legacy and cost cutting changes. I can give you more details and will write more on this.

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