Wheeling and Dealing
In the "Executive Decision" segment, Cramer once again sat down with Chris Loughlin, CEO of TravelZoo (TZOO), an Internet travel destination that is now expanding into the local "deal" space. TravelZoo recently delivered a nine-cent-a share earnings beat on a 29% increase in revenues.
Loughlin said that TravelZoo has 23 million subscribers to its service and with local deals, the company is looking to double the amount of revenue they generate per subscriber. He said the company is currently offering local deals in only 48 markets but will be expanding to 60 markets soon.
Loughlin also said that TravelZoo has chosen to roll out its local services organically, rather than through acquisitions. He said the service provides only two deals per week, focusing on quality over quantity and revenue. Loughlin described a heated editorial process in choosing which deals will make the cut given the limited availability.Loughlin also had great things to say about TravelZoo's European expansion. He said the Europeans get lots more vacation time than their U.S. counterparts and are far more savvy to travel deals. Loughlin called Europe an enormous market for TravelZoo, which currently only operates in four European countries. Cramer admitted that TravelZoo is a wild trading stock, with lots of ups and downs, but also said that the company is heading in the right direction. With Groupon expected to IPO soon with a multi-billion dollar valuation, Cramer said TravelZoo is a steal at just a $1.5 billion market cap.
Customized ApproachIn a second "Executive Decision" segment, Cramer welcomed Terry Lundgren, chairman, president and CEO of Macy's (M), a retailer whose stock has been on fire since the company reported an 11cent-a-share earnings beat on a 5.7% increase in revenues. Macy's also raised their guidance and doubled their dividend to 1.5%. Lundgren explained that Macy's is looking to be competitive in the long run, which is why the company took steps years ago to transform itself back into a world-class retailer. He said the 2005 acquisition of the May Company allowed Macy's to burst onto the national scene, while consolidating its seven regional buying groups into just one has increased efficiencies. But perhaps Macy's biggest decision, said Lundgren, was to roll out its My Macy's program, which grouped its stores into 69 districts, often with just 10 to 11 stores per district. Lundgren explained that each district is now able to buy merchandise that's right for their customers, leading to higher sales and loyalty. Lundgren also noted that not everyone in retail is winning, which means Macy's is taking share from other competitors. He said Macy's sells higher end brands like Coach (COH) and Polo-Ralph Lauren (RL) but is still seen as a value retailer. "That's the sweet spot," said Lundgren. Lundgren also told Cramer that Macy's customers are doing better financially. He said customers are paying down their debts and the Macy's credit portfolio is a lot stronger than it once was. Cramer said there's a reason shares of Macy's are up 74% since he first got behind the venerable retailer on Dec 7, 2009. Macy's, he said, is still a buy.
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