RICHMOND -- Best Products Co.'s inventory for the holiday shopping season has been reduced, in part because the retailer has stopped dealing with a handful of suppliers that demanded up-front payments for goods.
A recent report in HFD, a home furnishings industry publication, said the housewares suppliers demanded early payments, known as anticipation terms, because they were concerned that Best's financial position might deteriorate in conjunction with a $40 million payment due Jan. 31.
Best spokesman Ross O. Richardson confirmed the report that the Richmond-based catalogue showroom chain is no longer being supplied by nine housewares suppliers and a few suppliers of other goods. Richardson said Best deals with about 900 suppliers overall.
Richardson said Best had notified its suppliers earlier in the year that it would not accept anticipation terms this year, but some suppliers "came back and wanted them anyway."
He said Best had had similar problems with a few other suppliers of goods other than housewares.
The HFD report indicated some suppliers were uncertain they would be paid for goods already delivered. One supplier, according to the report, said Best owes $300,000.
Richardson said Best "continues to pay its bills on a schedule about average for the retail industry."
Richardson said other factors have resulted in inventory reduction. He said some manufacturers, anticipating an economic slowdown, have cut production.
"They're just not shipping as much," he said. "That's not limited to Best."
He said Best has also trimmed its inventory through a more efficient computer system that forecasts the company's needs.
Richardson said the company posts about 40 percent of its annual sales in the six weeks before Christmas.
"Christmas hasn't arrived yet," he said. "People are putting off shopping later than ever. The weekend after Thanksgiving this year wasn't the big bang we've come to expect. A lot of people are looking, but not many are buying."
Best, saddled with heavy interest payments since a 1988 buyout took the company off the stock market, has posted major losses. In the first half of this fiscal year the company had losses of $59.9 million, a 4 percent improvement over the previous year's first half.
The company recently obtained a $30 million line of credit and refinanced $175 million to improve its financial picture.
Best operates 195 showrooms, 37 jewelry stores and a nationwide mail-order service.