retail news in context, analysis with attitude

...with brief, occasional, italicized and sometimes gratuitous commentary…

• The Wall Street Journal reports that bankrupt Sports Authority, which filed for bankruptcy just weeks ago and announced plans to close about 140 stores, has filed lawsuits against more than 160 vendors. At issue, the story says, is $85 million worth of shoes and gear that Sports Authority has on consignment from vendors, and that they want back. Complying, the company says, “would be devastating to the business,” and it has sued the vendors ... even though a bankruptcy court judge told "Sports Authority it will have to comply with consignment vendor demands to return their goods, reinstate arrangements that existed before bankruptcy which means continued payments to suppliers, or settle with the suppliers."

According to the story, "The suits are designed to determine who gets the money when consigned goods are sold, vendors or the banks. Consignment arrangements are supposed to give makers of goods a direct claim on the money that comes in when the goods are sold. Sports Authority and its top banks signaled they are testing for defects in the consignment deals to upset those claims. If the lawsuits succeed, vendors that thought they had secured claims will wind up as unsecured creditors."

This has the potential to turn into a real hairball. If Sports Authority alienates a large swath of the vendor community, it will make it even harder for the chain to thrive once it emerges from bankruptcy.

• The Sacramento Bee reports that California Assemblywoman Cristina Garcia is introducing legislation that would allow the state to apply sales taxes to candy, arguing that candy does not meet the "essential" argument that should exempt certain products from being taxed. Interestingly, Garcia also has introduced a bill that would "lift taxes on feminine hygiene products like tampons and pads, arguing the fees burden women who have little choice in making those purchases."

• The National Retail Federation (NRF) is predicting that US spending for the Easter holiday "is expected to reach $17.3 billion. Those celebrating plan to spend an average of $146 per person, according to the survey. That’s the highest level in the 13 years the survey has been conducted and up significantly over last year’s $140.62 per person and $16.4 billion total."
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