Forum Topics LRK LRK CEO Meeting

Pinned straw:

Added a month ago

The interview with Lark's CEO (no, not that ONE one) is now up. The transcript is here:

Lark Transcript.pdf

My high-level takeaway, without having done any due-diligence, is that the business operates in a highly competitive space and brand is really the only "moat" you can hope to have (scale advantages matter, of course, but Lark cant compete with the Johnny Walkers of the world on that front). So it's no surprise that's what Stu is really leaning into. But they do have a great story, and while i'm not an expert on Whisky i've had it before and it was very nice.

The goal is to convince others in this $100b industry to think the same, and that's going to take a lot of marketing investment. The trouble is, it's one of the least certain ROI in terms of all expenditures. It's easy to waste a lot of money on that front.

But, there's a lot of scope for growth if they get it right, and with $65m in inventory alone on the balance sheet, and a market cap of $76m with ~$18m in cash, it's a bit of a net asset play.. But you have to be convinced of inventory carrying value and that the cash burn will reverse course.

Bushmanpat
Added a month ago

And it's a rare case where inventory appreciates with age!

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Lewis
Added a month ago

A bit late to the meeting, but so refreshing hearing from a new CEO. He still has a sparkle in his eyes (maybe from the whisky) and a passion for talking about the business. It will be really interesting to see if he's managed to sustain the energy, passion and spirit (no pun intended) after 12 months of market rough and tumble. Seems like the perfect guy for the job, has a real handle on what's needed and how to get there. I'm not sold on the idea as an investment, brand and taste are fickle, tricky things, but he has sold me on trying the whisky.

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BkrDzn
Added a month ago

Good product and I currently have the xmas and amaro editions on my bar cart but did anyone come away with confidence on whether this new CEO can take the business to the next level?

7

Lewis
Added a month ago

I'm confident he will do better than most, but it's such a tricky thing they're trying to do. He's trying to be Rolex, or Rolls-Royce. A Casio is a better watch in just about every measurable way than a Rolex, and a Camry is better than a Rolls in 95% of situations. If you want to top that game it's not enough to be good or even the best, you have to have an ethereal, trendy, inaccessible to most kind of thing that is normally lucked into by legacy and tradition. Very difficult to muscle into it as a start-up. Plus headwinds with lowering drinking rates and cost of living pressures. As I say, I think he'll do better than some MBA finance guy in suit would have, he seems to have his finger on the pulse of what's trendy and how to build a brand in that space. But it's a very tough hill to climb. I'll watch with interest, but it's too big of a bet for me.

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