Re: Astronomy vendors and their "sales"

On Mar 2, 11:41 am, Too_Many_Tools <too_many_to...@xxxxxxxxx> wrote:
This story reminded me of astronomy vendors, their so called sales and
their excuses for insignificant discounts in a severe recession while
their sales continue to dry up.

No discount = No sales = Out of business

Looks like a repeat of the Post Comet Halley vendor loss is coming....

TMT

February 23, 2009 10:39 AM PST
Last days of Circuit City: Lousy bargains, rumpled salespeople

I remember when "liquidation" meant something. There was a small
electronics store in my area that was closing down a few years back.
Signs all over read "Liquidation Sale." In the store, I found prices
slashed considerably. Some good stuff was 75 percent off. It was a
fire sale, and it was fantastic. That was a going-out-of-business sale
done right. What Circuit City is doing now, though, I don't get.

The company is shutting down, as we all know. But I was still shocked
when I went into Circuit City this past weekend and found a store that
was a shadow of its former self. The signature red shirts on employees
were ditched in favor of jeans and sweatshirts; DVD sales racks that
were once barely browsed were overrun by customers who couldn't help
but dive in to the store's 50 percent off DVD sale. But the real
bargains that Circuit City claimed we all would love weren't so sexy
after all.

I need a new HDTV. Usually, I buy my HDTVs from Amazon.com because
I've found it has the best prices and delivery service. But since I
knew Circuit City was going out of business, I decided to make a trek
down there to see if there were any hidden gems at a good price. Signs
said the TVs were 30 percent off, and when I looked around, I realized
the inventory wasn't picked over, as I had feared. There were some
nice Sony LCDs on the shelves, as well as Panasonic plasmas.

I was drawn to the Panasonic TH-58pz800u, which was on sale for
approximately $2,600 at the store. I own the 50-inch model of that
plasma and couldn't be more pleased with its quality. So when I saw it
offered at such a discount, the wheels started turning and I was
thinking about how I was going to be able to fit it into the back of
my SUV.

But then I checked Amazon's price. To my surprise, Amazon was offering
the HDTV at an even more attractive price: $2,372.

So I decided to find one of the Circuit City salespeople to ask if
they matched pricing that online companies were offering. I searched
far and wide for their signature red shirt and could find just two
people wearing it. Thinking the company must have laid off some staff,
I went back to examining the HDTV, when a twenty-something guy dressed
in a hoodie, baggy jeans, sneakers, and a crooked Mets hat walked over
to me and asked if I needed help.

At first, I didn't realize he was an employee and I looked at him
without saying anything. Then he told me that he works at Circuit
City, he's just not required to wear his uniform anymore ("After all,
am I gonna get fired?") and that's why I didn't recognize him as a
salesperson.

So I asked him if the company matched pricing and showed him my
iPhone, which was displaying Amazon's price of the same Panasonic
plasma. His response was short and biting: "Nope. We don't do that
anymore."

You don't do that anymore? How is it possible that a company that
needs to liquidate its entire inventory won't sell a product to a
customer for $200 less? It's a guaranteed sale!

Of course, explaining that to this salesperson would have fallen on
deaf ears since he wasn't in a position to make any decisions and I
don't think he would have cared if he could. He's there until the end
of March--that's the deadline the employees have been given at this
store--and after that, he's on to bigger and better things. Why should
he care if Circuit City, a company that has laid him off, will be
getting my money or not?

For comparison's sake, I went to Best Buy across the street to see if
it had that same Panasonic plasma and to ask its salespeople if they
would match the Amazon price.

After just a few minutes of browsing, a Best Buy salesperson in the
signature blue shirt came up to me and asked if I needed help. When I
asked her if they would match pricing, she said, "Absolutely." In no
time, she asked her manager if they could match my price on the
Panasonic HDTV and he came over to assure me that they could and the
offer was on the table indefinitely--I didn't need to take it right
that second if I didn't want it.

In spite of the Circuit City going-out-of-business sale across the
street, the Best Buy was overrun with customers, the company's blue
shirts were everywhere, and people were rushing to the checkout lines.
Even in its dying days when it should be the price leader and the most
willing to sell products, Circuit City still doesn't "get" it.

Under the guise of "Everything Must Go!" sales, Circuit City's
liquidators are doing their best to feign value to squeeze every dime
out of customers just one last time. Maybe it works (the company
announced it has sold $1 billion in merchandise over the past month),
but I still think it's a sad state of affairs. Circuit City is still a
wrinkled mess. Meanwhile, Best Buy is as vital as ever.

Another insight into the liquidation of excess consumer
goods...including telescopes.

TMT

The Liquidation Business: Too Liquid?
By Susan Berfield Susan Berfield Fri Mar 6, 8:08 am ET
Since the economic distress took hold this autumn, liquidators have
sold off some $15 billion worth of stuff -- the stuff of executives'
miscalculations and failed aspirations, but for all that, just
everyday stuff. Suits and sheets and college sweatshirts. Video games,
GPS devices, and plasma televisions. These goods had been accumulating
at troubled stores around the country, including Mervyns, Linens 'n
Things, Steve & Barry's, KB Toys, and Circuit City. And liquidators
think it's possible that some 12,000 other stores, stuck with several
billion dollars' worth of more stuff, may go out of business this
year, too.

This abundance is providing a bit of good fortune for liquidators, who
are brought in to sell a bankrupt company's inventory, and sometimes
the furniture and computers, too. But it is also unexpectedly
complicating their business. They have so much work that the big four
among them regularly join forces just to handle it all. They can hire
consultants for each project from a growing number of talented,
unemployed retail executives.

For the first time, though, liquidators are also competing with some
of the most respected retailers around, stores that never used to
lower their prices as precipitously as they now must. Because so many
Americans aren't buying anymore, merchants are desperately trying to
get rid of whatever they're selling. "The work is harder," says Scott
K. Carpenter, the head of retail operations at the liquidation firm
Great American Group. "It's harder to predict how consumers will
react. It's harder to predict our sales."


Get There Fast
Steve & Barry's, like most of these defunct retailers, came to a quick
end. The chain, opened in 1985 and known for selling reasonably well-
made clothes for $24.98 or less, had been in the midst of an ambitious
plan to expand its stores and refashion its brand. But poor management
in a suddenly unforgiving economic environment led to the inevitable.
The founders filed for bankruptcy in July, and a month later private
equity firms Bay Harbour Management and York Capital Management bought
part of the company for $168 million. But they too had trouble getting
financing for the retailer and had to shut it down. The bankruptcy
court approved the liquidation of Steve & Barry's Thanksgiving week.

For the liquidators, speed is crucial. When they make a deal with a
retailer, either they are paid a percentage of the final sales (the
retailer and its creditors get the rest) or they take over the company
entirely. In the case of the Steve & Barry's closeout, Great American
Group and its partners were working for a cut of the proceeds. But
whichever way it goes, no one wants to spend a dollar more than
necessary on salaries or leases or advertising.

At Steve & Barry's, the liquidators gave themselves eight weeks to
sell some $275 million worth of clothes that were piling up in 173
stores and a warehouse. The retailer had down coats, sweatshirts,
dress shirts, jeans, children's clothes, Sarah Jessica Parker's Bitten
line, and the Starbury sneaker by Stephon Marbury. But mostly it had T-
shirts: 5.4 million T-shirts. Getting rid of them would prove to be a
challenge.

It is the consultants who manage the day-to-day business of the
stores, often working in locations they've never seen with employees
they don't know. Great American Group has about 300 consultants on
call, 57 of them retained in the past six months. They have to be
ready to start on a project with just 48 hours' notice. Among them is
someone we'll call Mike Smith. Like many on this side of retail, he is
an experienced executive (20 years in the business) whose own stores
were closed out -- in his case by Great American Group. Four months
later, he was working for the liquidator. Carpenter finds a lot of
good people on the job, as it were. "The ideal candidates are those
who have lived through it themselves. They bring empathy and respect,"
he says. Smith, sensitive to the delicacy of his situation, didn't
want his real name to appear in this story. "In the stores, they just
call us the liquidator," he says.


The Beginning Of The End
In late November, when Smith first walked into Store 160, a 25,000-
square-foot space in Menlo Park Mall in Edison, N.J., it was fully
stocked with about $1 million worth of clothes. Black Friday, the
usually busy shopping day after Thanksgiving, was four days away.
Although the employees were aware of the company's troubles and knew
that some stores were closing, they still held out hope that Steve &
Barry's could save itself. But when Jan Mulligan, one of the managers,
saw Smith sizing up the store, she knew it was over.

"I'm Jan. I run this store. Or I used to."

"You still do."

"Well, we came in on a wing and a prayer, and I guess that's how we'll
go out. I started here three years ago on Black Friday. I've been
through two district managers and three store directors. I'm the
survivor. Or I was."

"You are. You've got PMA (positive mental attitude)."

"We thought we were O.K. We're one of the best-performing stores in
the country.... We've all worked really hard, and now it's over.
That's retail."

Signs such as "Rethink: Shopping" and "I Believe Fashion Is Not a
Privilege" sat near three racks of Bitten down coats that were going
for $24.98. Smith asked the employees to put up new ones: "Going Out
of Business. Nothing Held Back." The plasma television hanging from
the ceiling near the entrance had already gone dark, displaying just
the words "No Signal." Later that day, Great American and its partners
announced that Steve & Barry's was closing down.


Blue Christmas
Carpenter says it doesn't take long for new liquidators to figure out
how to run a sale under such constrained, often fraught circumstances.
The employees might be disenchanted, angry, at a loss, but as far as
the selling goes, "it's the same concepts, just a little different
mindset," he says. "What appeals to people in our business is that
there is a beginning and end. You hit your sales that week, and [the
next] week, and in eight weeks, it's over."

Yet in an economy as precarious as this, sales can be elusive.
Carpenter and his partners had already taken into account the new
frugality among consumers and lowered their expectations a bit. "If I
thought a Steve & Barry's would normally bring 50 cents on the dollar,
I might estimate 46 cents on the dollar in this environment," he says.
While the Thanksgiving holiday didn't go quite as well as Carpenter
had figured, he thought they would make up for it over Christmas.
Liquidators, though, are naturally limited in how they can respond.
Theirs are bare-bones operations to begin with, and lowering prices
more quickly is something they contemplate only under pressure. "There
is no real way for us to compensate for slow sales," says Carpenter.
"Our life span is limited. And I have the merchandise I was given."

Part of the problem with Steve & Barry's was that some stores,
including the one in Menlo Park, were overwhelmed by the arrival of an
enormous amount of similar merchandise. Late in December, Store 160
was receiving 400 boxes, each holding 24 items, every day at 7 a.m.
Before, it got two deliveries a week. The company had tried to sell
all these clothes directly from the warehouse in Columbus, Ohio, to
off-price retailers. "There was just too much of the same," says
Carpenter.

Sales over the Christmas holiday were somewhat disappointing. "It's a
reflection of the economy and the product they had," says Carpenter.
"You can only sell so many T-shirts." The liquidators ended up
discounting deeper and earlier than they expected. In January, as the
eight-week deadline approached, shoppers at Steve & Barry's could buy
five items for $5. They were lined up around the store to pay. "It was
chaos," says Vicky Jackson, the store director, who, with Mulligan,
supervised 35 part-time employees. "There were piles of clothes
everywhere, people rooting through everything. We couldn't keep up."

Local wholesalers regularly dropped in to the store, buying
merchandise by the box straight from the back room. No one is sure
exactly who they were, but it seems likely the clothes will end up at
bazaars in South Asia and Africa. "Basically we sell to anybody with
cash," says Carpenter.

A few bikinis and miniskirts were all that was left by Sunday, Jan.
11, the last day of business for Store 160. Even the signs had come
down. The managers brought in pizza and a cake. They had just found
out no one would be receiving any severance or vacation pay. "We
stayed for our own pride, not for the company," says Mulligan. She's
given up on retail for now. Jackson hasn't, but says there's not much
out there.

Smith moved on to another liquidation -- Circuit City, with $1.8
billion in inventory at its 527 stores. As that sale nears its end,
Carpenter says he's received 15 or so resumes from the chain's soon-to-
be-unemployed managers.

These days, Great American is becoming more selective about which
bankrupt companies it takes on. "When the business is so fast and
furious, we have to decide where to put our resources. We will devote
our time to the larger projects and pass on the smaller ones," says
Carpenter. "Before we would go after every deal there was. No profit
was too small."

.