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Those calculations aren't meaningless as investors assumed a certain number of stores selling at a certain rate would still equal the same sales/profit etc.
Covid's disruption to the supply chain network - ie lack of truck drivers and warehouse personnel - was the reason given for the slower than expected rollout.
As for the increased rate then Yes, more production, more deliveries, more trucks = more stores! You don't need to know anything more than that and you are just trying to sow seeds of doubt - ooh they've only gone out to x stores so far so how are they going to go out to 10,000 by March.
Obstando. Just cut and paced and found this update on Zoetics operations 19th November 20.
"The Agreement, which concerns the sale of Zoetic’s Chill brand of tobacco alternative CBD products, has already seen distribution begin across 125 new US stores in the first week alone. Whilst the Company is still at an early stage in the execution of a broader roll out, the speed and extent of distribution has exceeded expectations and stands the Company in good stead to beat launch targets should this pace continue."
I agree that it was not a "solid" number prediction for outlets but everyone who had done their calculations has used this number since. So even though their target of 10,000 outlets holds for March 22 they have never had a official linear model in place. Which made all those calculations meaningless - until we hit a milestone target of say 10,000 outlets.
So thanks for that.
Do you know of a way that they could accelerate their numbers over the next 5 months so that they achieve the 10,000 target - it works out, assuming 3,000 outlets now on stream - at 7,000 new outlets over say 6 months. 1150 a month approx on average.
I'm not trying to trip anyone on up here, just trying to understand what method could possibly treble their existing rollout system over next six months.. ..........and possibly use vans ! Cheers Vas.
My interpretation of a non linear roll out is that some months not many will be added and some months many thousands. Other than that it's irrelevant how they do it unless they massively fail to hit the 10,000 store count by end of March 2022. It's like anyone's job, sometimes you have lots of patients to push about, sometimes very few!
Don't forgot they have more products in their range to roll out now as well of course. How are you going to make that sound dodgy??
Obstando. That's interesting. In my mind I had them down originally as saying 125 per week / 500 pm. So the company never specified this number? ill check, you might be correct. Thanks .
@vas - you are confusing store roll-out with company growth. Whilst they are linked they are not the same and the company have always used the non-linear reference to growth and not the store roll-out. The company have said that the roll-out is planned to be at x stores by a certain date and y stores by another date. Others have interpreted that to mean 500 stores per month but that is not what the company have stated.
Now you are just being silly. Lots of talk on here of the new nonlinear model rollout....just wanted to find out what other peoples interpretation of this is . So far we have learnt it involves vans.
Do you want to know the names and addresses of all the drivers too? Make sure they have the right credentials?
Ha ha V, Good.
Sorry. That was my mistake. How they going to do this. Any ideas?
Just a few thoughts so don't take it badly anyone.
I'm trying to work out why the change in linear to non linear rollout of outlets and also talking a outsiders share holder perception here. And i'm only looking at the issue of opening new stores , not how much per store we sell etc .
This past year we were told to expect, (and we all did the calculations) , a linear model journey from a few thousand outlets to 10,000 outlets by July 22.
This linear model was described as a minimum of 500 outlets taking on CHILL and selling CHILL every month for approx. one year so that by July 22 around 10,000 outlets would be on stream. There was plenty of room for them to over please here with some months maybe hitting 1000 openings if possible.
The world changed, business changed, the targets were not met, and we are now informed we are using a non linear model for achieving the 10,000 outlets that apparently will be achieved by sometime around July 22. Therefore, the goal has not changed and they will still need to opening a minimum of over 500 outlets on "average per month over the year" to hit the
10,000 target.
I liked the non linear model because investors had a chance to see progress actually being made , and what could have been monthly, but was decided on a quarterly basis.
The main difference that now exists with the past linear model and todays non linear model is that there is now an expectation of lumpy data being reported over time, no steady accumulative growth month on month, or quarter by quarter. The growth in number of outlets / revenue will be unpredictable, patchy, one month low, next could be higher or visa versa..... which is probably closer to what has happened in reality here this past year probably.
What i do not understand is that IF the steady monthly growth ( linear model) can't be sustained in todays business environment ( else why abolish it ) then what system or type of distribution strategy will CHILL be using for the non linear, more unpredictable method going forward. Does this mean that the quarterly revenue statistics will now be scrapped ! as they will be meaningless to compare like for like.
However you look at it what we do know is that they need to open 10,000 outlets to sell CHILL by July 22
If they were confident in beating the previous objective of 500 outlets per month , then they would have kept it as it was.
I can only think that they realise that slow outlet opening is here to stay for a while, and that they are working on a strategy for next year to escalate the outlets in a few short months at a later date - hence buy time, take pressure of what must be an ongoing slow down in distribution in US at present. Why else change the strategy at this point to a unpredictable one.
Anyone else have any views on why change the model at this stage in the year.