Forget plastics, the real action these days is arranging going-out-of-business sales. Debbie Belgum at California Apparel News looks at the retail liquidation game, which is made up of a tight-knit group of companies - many of them based in Socal.
While a nearly unprecedented number of stores are closing their doors because of bankruptcies or severe cutbacks, retail liquidators are busier than ever as the economy catches a cold that is fast turning into pneumonia. “This fourth quarter has been off the charts,” said Andrew Gumear, chief executive and co-owner of Great American Group, a major retail liquidator located in Woodland Hills, Calif. “We are probably the busiest we have been since 2000, and before that it was 1990 or 1991.”
Typically, this small band of inventory specialists goes to bankruptcy court, makes a bid for a company’s goods, purchases them and then quickly sells them to recoup their costs. Often, several retail liquidators work together to spread the risk of selling inventory that might not sell quickly. Liquidators also estimate the value of inventory when retailers are trying to restructure or negotiate an asset-based loan. Others have auction houses that buy and sell major assets such as heavy-duty machinery, aircraft parts and oil-drilling rigs.