Did HoF make you sign any type of agreement regarding not discounting or them taking the merchandise back? I don't see how they can refuse to take merchandise back if you discount it, if they agreed on return privileges. If there is a signed legal document, both of you can be held to it. I -hate- lawsuits, but that's what they are for. 100k worth of merchandise is a lot of dead inventory to sit on when every single dollar counts now. This sounds harsh, but I personally feel that if you are ready and willing to burn the bridge and terminate all current and future relationships with HoF, do whatever it takes to get rid of the line. Call HoF over and over and tell them plain and simple that you are serious about them taking back their line. I wonder if it's possible to sell the line at cost minus 15% to a jewelry store that IS selling HoF? Would HoF notice? Do they (can they?) monitor their authorized dealers inventories? As far as I know, they cannot stop you from liquidating it...but if it terminates some type of business contract that MIGHT terminate your return privileges? So in the end I'm back to my questions at the begining...study any and all paperwork and legally binding documents governing the business relationship. I hope this turns out well for you. (Oh, and don't blame yourself for the line not selling, you seemed to have done everything you could. Some communities and clientele just will NOT spend the extra money for a branded pseudo-commodity. Even large chains have stores that can NOT sell their branded diamond...just like some people will never spend more than $30 on jeans or $25 on a pair of shoes...)

I have had my share of brands and will never give any supplier a monopoly over my business ever again. I will control the product I sell or I won't sell it. I was a Hearts on Fire Dealer and in the beginning, it was a very strong brand, but over time they used their monopoly to demand more purchases, more displays, more inventory. In the end it was no longer feasible to carry and we began taking steps to leave the line. It took about a year after we made the decision. I was on the golf course at a class reunion with my lawyer and a member of my management team. We mapped out the process and were able to replace HoF with private label brands which gave us far better quality, margins, and much better quality of life. No more rude calls from the likes of Tom Carlo. Eventually they came down and wrote the check and took the goods. The 100k means a lot more to you than to them. You need to make sure it becomes important to them so you can get your money. This blog goes a long way. Running a liquidation of the line using the internet may also get their attention. The point is, you need your money as quickly as possible. Look over the documents, but in the end, you have the right to sell what you have bought however you want. The documents cannot take your ownership rights away from you and if you have paid for the product then sell it quickly. Personally, I'd sell it in a major liquidation over Christmas. Advertise it and push it in your market and make it a poison pill for other dealers in your market. You do this and you'll get your check.

What a predicament! But I might suggest you not throw the baby out just yet. You're coming into a great(hopefully) time. People are looking to buy. If your agreement does indeed prevent you from discounting, or advertising a discount, remember there are other things you can do. Gift with purchase. Free mountings. Get creative and tune it to your clientele. If you have a written return privilege and its not expiring, you could consider granting HOF the flexibility to handle your situation later which will give you the chance to enter the holidays with the merchandise and hopefully turn some of it. Besides, sometimes it just takes time for a line to catch on. If your cases are full right now, and you returned it all right now, what are you going to do with all that suddenly open space in your displays? Look empty at Christmas? That's not a good image to send to the public, particularly when the media is full of bad news. You wouldn't want people to even think, "

What a predicament! But I might suggest you not throw the baby out just yet. You're coming into a great(hopefully) time. People are looking to buy. If your agreement does indeed prevent you from discounting, or advertising a discount, remember there are other things you can do. Gift with purchase. Free mountings. Get creative and tune it to your clientele. If you have a written return privilege and its not expiring, you could consider granting HOF the flexibility to handle your situation later which will give you the chance to enter the holidays with the merchandise and hopefully turn some of it. Besides, sometimes it just takes time for a line to catch on. If your cases are full right now, and you returned it all right now, what are you going to do with all that suddenly open space in your displays? Look empty at Christmas? That's not a good image to send to the public, particularly when the media is full of bad news. You wouldn't want people to even think, "

....from above....You wouldn't want people to even think, "They must be going out of business". That or insist on returning right now for immediate settlement, then buy a performing line that you can have in place in time for the season.

....from above....You wouldn't want people to even think, "They must be going out of business". That or insist on returning right now for immediate settlement, then buy a performing line that you can have in place in time for the season.

I dare you to put it on Overstock, with Levian.

Shanu, I think you should rethink your strategy! HOF is a powerful brand, and a very honorable company. When I first carried the line, it did not perform well for me, because I had sticker shock when I looked at it. Once I realized that there are lots of customers out there who want to express their love by buying the best, I started to sell Hearts on Fire like crazy. Give you staff a pep talk, and really spiff their HOF sales. The margins being as strong as they are, you have room to give your salespeople a big incentive to sell HOF. If your salespeople are selling emotion and perfection, your customers will be thrilled with the purchase of Hearts on Fire, and come back for more the next time they want to express their love. HOF is an honorable company, and they may be getting swamped with calls from panicked retailers right now. If I were you I would give it my best shot thru the Christmas season, and if it does not work, call them in January.

Most brands in stores act as a sample line for special orders. Yes, you will sell product over Christmas, but you will also have special orders which could be held hostage. You almost have to discount the line if you are only selling stock from your case and not taking special orders. Watch out! I've seen some pretty grim situations when brands turn on you. You don't want to be caught waiting for that 20,000 special order ring Christmas eve, which doesn't show up from HoF because they are mad at you.

What is sticker shocked?

What is sticker shocked?

Sticker shock is the (negative) surprised feeling someone has when they see the price tag of an item and feel that the price is extraordinarily high...

oh...that sounds very familiar :)))) Thanks!

If you don't get now that, like them or not (and they can be a pain to deal with,) brands are the future and we will be irrelevant without them then you had better think about another business. I can't get Hearts on Fire right now but I know three or four of my friends carry the line and they are very successful with it. I don't hear about other brands doing the kinds of things for their retailers that Hearts on Fire does. Should they also be a bank for retailers at this time of year because they didn't do a good job? I would worry about what brands would ever go into Ms. Guiliani's store with what she is doing? If you have issue, deal with it quietly. Don't announce to the trade that you are trouble to deal with. There is no substitute for retailing 101. Stop looking for vendors and brands to do your job for you.

Guiliani, you are a brand in your local area. Remember that fact, advertise that fact, live that fact. I too think HOF is cash strapped and I think is been since Vegas. I think they opened a ton of jewelers this year in Vegas to utilize young receivables as method of bolstering a line of credit. Do I have any proof of that NO, but I heard from many HOF dealers that jewelers very close to them (like blocks way) suddenly had the line "exclusive" well blocks apart is not exclusive. Lines of credit on receivables depend on receivables that are 90 days old or younger and you can often get 50% to 80% of the value of the receivables in cash on the line. So if you have a liquidity crisis open 50 new dealers at 100K each, have young receivables of $5,000,000.00 to show the banker and boom $2,500,000.00 to $4,000,000.00 opened on your line of credit. I think many brands are doing this and its a pyramid that will topple when lines get called in. Independent jewelers are the reason brands exist not the other way around. If you have been a good partner (and it sounds like you have) then you should be treated as the partner you are.

Comments for this topic are now closed. While acknowledging this discussion has been both interesting and controversial, JCK believes it especially has emphasized the need to address the issue of brand-retailer relationships in a broader editorial forum, rather continue to debate what did or didn’t happen in this particular instance. We therefore will be addressing the brand/retailer issue in print shortly, and request that both everyone who has posted on here as well as all retailers and brands who have dealt with a similar situation, to please contact us offline. Please contact me directly: Hedda Schupak, JCK editor-in-chief, hschupak@reedbusiness.com, or (646) 746-6440.