I’ve found over the years that retailing is a sector where value investors have trouble generating returns from. Consider Buffett’s comments:

“I think retailing is just too tough for me, just generally,” Buffett said. “We bought a department store in 1966, and I got my head handed to me. I’ve been in various things in retailing. … I bought Tesco over in the UK and got my head handed to me. Retailing is very tough, and I think the online thing is hard to figure out.”

In 1993, Warren Buffett acquired Dexter Shoe Company with Berkshire Hathaway’s stock. Dexter was earning $40 million per year pre-tax. However, it soon suffered from declining sales from increased competition and later winded down its operations in the US. In 2008, Buffett told shareholders that Dexter Shoe Company was one of his worst mistakes. The stock Buffett used to pay for the company ......