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February 13, 2001
Gargantuan Inventory Pile-Up Bodes Well For Barter Industry
Retailers across the country are staggering beneath tons of unsold holiday merchandise--the largest in decades. Desperate to empty their bulging warehouses they're dumping their stockpiles to deep-discount stores, and turning to barter companies and liquidators for relief.
All in all, retailers are trying to liquidate a gargantuan pile-up. Inventories have hit $4 billion, up from just $250 million a year ago, according to liquidation experts. Half of that comes from two mega-bankruptcies since Christmas...Montgomery Ward and Bradlees.
The rest comes from smaller failures and a series of closings by chain stores. OfficeMax, for example, is shutting 46 stores and J.C. Penney 47 stores.
John Kramer, president of corporate barter company Icon International, says retailers are offering to trade merchandise for TV ad time and other services. "We've always had last year's Christmas gifts such as breadmakers and snakelights, but now we're looking at a lot more stuff that could be put back on the shelves."
Why did the stores make such a horrendous mistake? (Wall Street analysts expected a 5% increase in retail profits for the fourth quarter, but are now looking for a 2% drop!) They were far too optimistic about Christmas sales back in the spring and summer, when many of them put in their holiday orders. On top of that, overexpansion of U.S. stores has added to the widening inventory ocean.
What's ahead? Retailers are still likely to face tougher times thanks to a new mentality by bargain-hunting shoppers. A year ago, one-third of U.S. households surveyed by America's Research Group said they were willing to pay full price for many of their purchases. Today, that number has fallen to fewer than one in four--a sign that may spell even bigger inventory troubles later on.
ITEX Corporation Gets Exposure On Haig's World Business Review TV Series
Collin Christensen, president & CEO of Sacramento-based ITEX Corporation, a nationwide trade exchange network, will be seen on Alexander Haig's World Business Review, February 10-15 on U.S. public television stations. For specific dates e-mail firstname.lastname@example.org.
Haig, the former Secretary of State for President Reagan and COO/President of United Technologies, queries Christensen about trade exchange services.
According to Kristin Pealy, the show's associate producer, ITEX was selected to appear on the program because they use the Internet as a major tool, assisting their clients in organizing their resources.
Christensen declared, "We believe using internet technology is a critically important tool for our clients. Not only for brokers and corporate communications, but for data and transaction processing as well."
Here And There. . .
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