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Michael Glickstein
Michael Glickstein

Syms Corp. - A Deeply Discounted Retail Real Estate Opportunity

April 26, 2011 | About:

SYMS is an off-price retailer that has an enterprise value of ~$134 MN. SYMS currently operates 53 stores – 19* of which are owned and 34 that are leased. The current stock price of SYMS is ~$7 per share, which we believe is materially below its intrinsic value. As outlined by the following analysis, we believe the enterprise value could be more than doubled, by executing on one or more recommended actions.

*Number of owned real estate include SYMS asset in Rockville, MD, which SYMS agreed to sell on March 30, 2011, and since has listed its asset in Tampa, FL for sale.

We believe SYMS could benefit shareholders by monetizing the value of its owned real estate, and that the company can increase the value of the shares by implementing at least one of the following approaches:

· Liquidate or sell the company

· Spin off the real estate business

· Divest either business

· Recapitalize the real estate

· Increase transparency by disclosing both the owned real estate and the off-price retailing segments

· Close underperforming stores

· Improve communication with the investment community

One scenario where all stakeholders might benefit is by selling the real estate, allowing the family to maintain control of the off-price retail business.

Another scenario where shareholders might benefit is bringing in a retail executive with a track record for turnarounds.

Why SYMS and Why Now?

  • SYMS offers a deep value investment opportunity. The company is not widely followed by sell-side or institutional investors due to its size and float.
  • Off-price retailers are performing well both operationally and as measured by their stock price as consumers look for value; however, SYMS continues to lose money and the stock price is stagnant.
  • In addition, retail REIT share prices have materially outperformed and cap rates have compressed.
  • The acquisition of Filene’s Basement was an attractive distressed purchase, with value likely not reflected in the SYMS stock price.
  • The passing away of industry pioneer and company founder Sy Syms and underperformance with his daughter Marcy at the helm increase the likelihood of change.
  • Activists in the past have tried unsuccessfully to create change. However, the difference between the intrinsic value of the business and the stock price has hardly ever been as material as today.
  • We believe a main reason for the substantial discount to our estimate of value is the absence of a visible catalyst for change.

Further analysis can be found in our detailed presentation here in PDF format. The data in this presentation reflects research conducted primarily in the last quarter of 2010. However, we believe that subsequent events have not materially affected our main conclusions.


The analyses and conclusions of G Asset Management, LLC and/or its affiliates contained in this presentation are based on publicly available information. G Asset Management and/or its affiliates recognize that there may be confidential information in the possession of the companies discussed in the presentation that could lead these companies to disagree with G Asset Management’s and/or its affiliates conclusions. This presentation and the information contained herein is not a recommendation or solicitation to buy or sell any securities.

The analyses provided may include certain statements, estimates and projections prepared with respect to, among other things, the historical and anticipated operating performance of the companies, access to capital markets and the values of assets and liabilities. Such statements, estimates, and projections reflect various assumptions by G Asset Management and/or its affiliates concerning anticipated results that are inherently subject to significant economic, competitive, and other uncertainties and contingencies and have been included solely for illustrative purposes. No representations, express or implied, are made as to the accuracy or completeness of such statements, estimates or projections or with respect to any other materials herein. Actual results may vary materially from the estimates and projected results contained herein.

Funds managed by G Asset Management and/or its affiliates might have invested in common stock on Syms Corporation (“SYMS”) and/or related securities. G Asset Management and/or its affiliates manage fund/s that is in the business of trading – buying and selling – securities and financial instruments. It is possible that there will be developments in the future that cause G Asset Management and/or its affiliates to change its position regarding SYMS. G Asset Management and/or its affiliates may buy, sell, cover or otherwise change the form of its investment in SYMS for any reason. G Asset Management and/or its affiliates hereby disclaims any duty to provide any updates or changes to the analyses contained here including, without limitation, the manner or type of any G Asset Management and/or its affiliates investment.

About the author:

Michael Glickstein
Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

Rating: 4.0/5 (14 votes)


Kengolub - 6 years ago    Report SPAM
Syms has been touted for years as a real estate play. However, the real estate is essentially all Syms stores, all of which have a consistent style. The prototype is a windowless 30,000 SF box with a full flight of stairs up to the entry and selling floor, then narrow escalators down to a full basement selling floor. I have always believed that the prototype is a good-luck replica of Sy Sims original store. The question is: what other retailer wants a 2 level 60,000 SF box with only a 2nd floor and a basement? Take Syms business out of the picture and these stores could all be white elephants.

By all means consider Syms as a business investment, but don't expect the underlying real estate to turn into a pot of gold.
Batbeer2 premium member - 6 years ago
This idea worked out pretty well......

Thanks for sharing.

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