We received direction from corporate to "sell what we own" this week

[TwixVoy]

This week corporate started a new "plan" to basically purge our DCs (distribution centers) and stores of what we currently own nation wide. The company has cut back drastically on the amount of inventory the stores and DCs will typically keep on hand.

So basically this means say distribution center number 22 typically holds 1000 magnavox 32" TVs. That is a hell of a lot of TVs right? Say that DC services 50 stores. The plan is to jam those TVs on to pallets and push them to those stores. After which a massive deep discount sale (either advertised or not) will start in that market to get rid of those TVs. They will be marketed as regular sales to the public. After that the plan is for that DC to store no more than 200 Magnavox 32" TVs at any given time. (not actual numbers for Magnavox TVs, but they will be drastically reduced to those levels) Basically 80% reduction across the board on standard inventory levels.

The company is doing this as fast as possible and will be doing it for whatever items we currently have a large supply of at stores and DCs - especially high dollar items.

What is interesting about this is the fact that the company wants to be 100% FINISHED with this process nation wide by the end of the 2nd quarter.... at which point inventory levels will be kept ultra low the rest of the year.... Which during any normal year would be exactly the opposite - come the start of the 3rd and 4th quarter we would be trying to INCREASE inventory levels at the DCs and stores. But the plan right now is to do exactly the opposite.

Basically the executives and analysts at HQ are expecting massive sales declines in the 3rd and 4th quarters this year so they are trying to unload as much of the products we currently "own" and are sitting on right now. If I had to summarize the message the stores got explaining why we are trying to sell all this inventory by the end of the second quarter in one sentence it would be "Let's get rid of this shit while we still can"

[nadinbrzezinski]

1. Ah the depression level economics is here

sorry, but it is gonna get very rough, like nobody can imagine who is alive today, UNLESS they lived back then

[Hydra]

2. As I keep lamenting

Sales all around and never any money to take advantage of them.

It should be interesting in the coming months- can your company survive by reducing inventory? Time will tell.

[TwixVoy]

3. I hope so

we are one of the biggest retailers in the nation. If we go down it won't be pretty.

[marketcrazy1]

4. who do you work for???

????

[Vincardog]

5. Does your co have anything in Bentonville Arkansas?

[IDemo]

6. I just heard the Maumelle Arkansas DC is history

Don't know if that is near Bentonville - http://www.nwanews.com/adg/national/250809/

[B Calm]

14. Target has closed a lot of stores nation wide!

[IDemo]

16. This is a "DC", or distribution center, not a store

It's a massive warehouse where goods are stored for distribution to the retail stores within a region.
Closing one of these makes a very real statement about how many sales you expect to make in the coming
quarters (as well as laying off the ~500 employees who work there).

[B Calm]

17. I think I know what a distribution center is. Hell I drove for Auto Zone

for 6 damn years!

[tavalon]

10. I lnow why you cant tell but thank you for telling what you can

[dixiegrrrrl]

7. I understand why Twix cannot and should not mention the store.

At this point, short selling would be an issue for anyone who knew.
Insider info and all that.

Excellent picture of deflation....no one is buying, there is money still out there in some places to buy, but no one wants to 'splurge".

Thank you Twix for your update...grim news indeed.
Sharing the up front and personal stuff is important...god knows business and government is trying to hide bad news.

[dieselrevolver]

8. Scary as hell

A lot of people said the worst would be over by summer, but it looks like we're in for a horrible year. I don't know how much longer I can keep waking up with my first thought being how fucked we all are. Still, I'm obsessed with reading threads from people with inside information (those who work in retail, etc.) I started seeing those pop up last summer and they keep getting worse, from a few layoffs to complete inventory liquidation.

I really hope your company finds a way to make it and that you remain employed. Good luck.

[tavalon]

9. Anybody with half a brain can see where this is going and

even if Obama can get Congress to work with him and even if every other political group on earth can get it together, we are still going global depression, the likes of which haven't ever been seen or maybe we're really luckly and they have been seen back in the 30s. I'm hoping for it to be no worse.

[B o d i]

11. "Just in time" inventory management is not a new concept

http://en.wikipedia.org/wiki/Just_In_Time_(business)

[Ikonoklast]

18. This is not a JIT issue. It is a deflationary issue.

Target is betting that selling hard goods with a large price ticket will do two things:

A. Overall sales numbers will decline as consumers boycott the retail arena. Already happening.

B. Pricing pressure on manufacturers will cause them to cut wholesale prices or offer quantity-purchasing discounts in order to either stay in business, or remain competitive; making current inventory expensive in relation to replacement cost.
You have to dump higher-priced inventory asap if you are going to compete price-wise, or be willing to take a loss on that inventory to price match against retailers that have already replaced the higher-cost inventory with the newer low-cost inventory.

[underseasurveyor]

12. Just in time for the tax return season

*squeeze* Get all you can while there's still a little bit left to get.

[ecstatic]

13. So once inventory is lowered, do you think prices will stay down

or shoot back up?

[TwixVoy]

19. Prices have held steady

our pricing manager was showing me some crazy shit that was going on with prices last year. (for instance, corporate told stores to increase prices on 12 packs of coke product to $7 (yes, $7), but reversed themselves a week later.

So far we have not heard anything about prices going up.

[RainDog]

15. ironic. tv manufacturers moved jobs to Mexico (as in RCA)

and now we face the result of a decade of offshoring labor jobs.

no one can afford to buy the f**king teevees.

no matter how cheap the price, if you don't have a job, a teevee is really low on the list of priorities. but, of course, CEO salaries are sacrosanct (if you're a republican.) We need jobs, not tax cuts, and this has been obvious for years.

I cannot believe the republicans have continued to try to force tax cuts as a solution. they are simply not in touch with reality and haven't been for the last 8 years.