Winmark Corporation Update: Special Dividend Of $5 Plus Progress With Style Encore
|February 5, 2014||Posted by Nat Stewart under Compounding Machines||
Yesterday, Winmark (See my prior feature article on the company here) announced a $5 per share special dividend that will be financed with a combination of cash on hand and bank borrowings. I believe that this is a smart move. It suggests to me that the company is confident about it’s future, particularly it’s free cash flow generating abilities.
Style Encore, the companies new franchise concept (Second hand women’s fashion, very similar to Plato’s Closet which is the company’s hit teen-focused retail store) looks to be making solid progress. If I counted correctly on the company’s web site, 6 locations are now open, with 33 set to be opening soon. This is very exiting news. If Winmark can replicate the success it has had with Plato’s closet with Style Encore, it will add very substantially to the company’s free cash flows over the next few years. With CEO John Morgan’s strong track record and ownership of more than 34% of shares outstanding, I am confident that this company will continue to be shareholder friendly.
Stay Tuned – the Annual Report should be out some time in Mid March. I look forward to following the company’s progress.