TFM 9.75 05/01/23

The Fresh Market

Consumer, Credit


Publicly traded companies mentioned herein: Amazon.com Inc (AMZN), Apollo Global Management LLC (APO)

Highlights

The presenter is long The Fresh Market’s (TFM) senior unsecured bonds, and sees the risk/ reward as favorable in the low 80s (a 14% YTW). He is comfortable investing alongside Apollo, which closed the ~$1.5 billion deal for the grocer in April 2016 (the $800mm of debt was issued shortly thereafter). The presenter noted, “One of Apollo’s best partners, Andrew Jhawar, head of consumer and retail, has previously worked on Sprouts, Smart & Final, etc. and is excellent”. Additionally, George Golleher, the former CEO of Smart & Final and Ralphs Grocery Company/Food-4-Less (while Apollo owned them) is involved as well. In his opinion, TFM’s decelerating sales and EBITDA growth over the last two-three years is the result of cyclical - not secular - challenges, and the company’s ability to manage its cost structure and fix straightforward store-level issues should allow bondholders to realize healthy returns.

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Idea Discussion

Commentor 1 - 2 weeks ago

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