How do you liquidate the liquidator?
Canadian company Liquidation World, well-known by its large retail stores of products obtained from foreclosures and bankruptcies, also offers professional store-closure sales management.
If anybody was better suited to permanently close a Liquidation World, it would probably be Liquidation World.
For more than a week, the company has been doing what it does best at its Whitehorse location by selling off inventory at ludicrously low rates in preparation for permanent closure of the store.
In Whitehorse, the bright yellow sign offering customers the chance to “find something different” will soon be gone.
The Whitehorse store is currently managed by Brian, a Calgary representative dispatched almost a week ago to gently guide the store through its death throes.
Sending a “close-down guy” is standard procedure, but the store’s original manager has been nowhere to be found for almost three weeks.
“There’s no question, in our business, that people influence the success of our locations, probably more so than in other traditional retail stores,” said Liquidation World president and CEO Jonathan Hill, speaking from head office in Brantford, Ontario.
“I don’t think we’ve had as easy a time as we would have liked, from the beginning, in terms of personnel in that market,” he said.
In the inevitable confusion of a Liquidation World store closing (“It’s been insanely busy,” said Brian) the store may have liquidated more than it bargained for.
The store’s safe has vanished.
Between store closing on Sunday, October 19 and store opening on Monday, October 20, police reported that an unknown individual broke into the store and stole a safe.
No suspects have been identified, and the case is still under investigation, said RCMP spokesperson Sgt. Mark Groves.
The safe contained several days’ worth of deposits.
It “wasn’t a fortune, but it wasn’t an insignificant amount,” said Hill.
“We’re obviously disappointed, it’s yet another cost of what’s not been a particularly pleasant experience so far.”
Liquidation World closures operate in frameworks of “progressive discount,” with items marked down until they’re all gone.
Inevitably, some items fall below cost, imposing a loss on the company.
In a typical store closure, these losses can run as high as $200,000 to $300,000 — a virtual quarter-million-dollar subsidy to local shoppers.
Earlier this year, at the end of Liquidation World’s second quarter, the company posted “disappointing results,” according to company brass.
Headquarters sprang into “immediate action to reduce costs and simplify our business.”
Expenses were streamlined, positions were eliminated, inventory was made more “exciting,” and seven of the company’s least profitable stores were put on the chopping block.
Whitehorse wasn’t one of the doomed seven, but at the 11th hour the city became the eighth candidate for a trip to Liquidation World heaven.
“The Whitehorse Store, we had hoped would not be on that list, but a variety of things didn’t make sense for us,” said Hill.
Transport costs were one factor — especially since Liquidation World relies on high volume and low profit margins — but a “host of reasons” ultimately sealed the store’s fate, said Hill.
“Had our business been stronger in general, we probably could have been in a position where we would have been a bit more patient or we would have perhaps been able to focus more on that location,” he said.
With many economists predicting that the world economy is now verging on depression, the future looks bright for Liquidation World.
In October 1987, when the events of Black Monday lopped an unprecedented 23 per cent off the Dow Jones Industrial Average, Liquidation World was being founded in Calgary.
“Our business was born out of the recession in the early ‘80s and the recession in the early ‘90s,” said Hill.
Throughout the United States, as financial markets continue to teeter, discount stores have seen business surge as wary consumers become more frugal.
But for Liquidation World the advantage is two-fold.
“We get the benefit of more liquidations and a broader product offering, but we also have a consumer that’s a little bit more conscious of how they spend their money — and we’ve got better deals to offer,” said Hill.