.<font color=#006400>**** IMPORTANT MEMO FROM ERIC
Eric Lehner to me
show details 9:09 AM (1 minute ago) Reply
Memo Re: Status of Listings for Winning Brands
This memo is intended to clarify the status of account listings for Winning Brands products. I am providing this update as a courtesy to shareholders because it is common knowledge that since 2007 Winning Brands has been targeting the month of April 2008 to secure a significant retail banner in the United States either for a national listing or the commencement of a formal regional test..
This is to confirm that the company has been in discussion with a number of U.S. retailers regarding the listing of Winning colours® Stain Remover, KIND™ Laundry Products and CLEAN1™ Outdoor Cleaner. It is enormously difficult to balance the desire by shareholders to know things on a current basis with the desire (and expectation) by discussion partners that business arrangements are confidential. As a general principle, Winning Brands has been very forthcoming about its various initiatives but has encountered feedback from discussion partners that people identifying themselves as shareholders are contacting such parties directly and making enquiries about the status of these discussions. The effect of such calls, visits and other forms of contact is to create concern by the prospects that the business relationship will be complicated by non-trade issues.
The plain and simple fact of the matter as at April 3, 2008 is that although the company has not yet received permission by its discussion partners to announce the commencement of a business relationship, there are listing negotiations underway. Such negotiations involve more than merely a decision of whether to put the product(s) “on the shelf”, but also a variety of detailed vendor agreement particulars including:
Will the account be supplied directly or through a distributor
Whose personnel will be used for detailing and in-store training
Which promotional allowances will be applicable
Is there any form of exclusivity associated with the status of first/lead retailer
Is the company in a position/willing to change its sizes or package configuration to suit a particular retailer’s preferences
What insurance arrangements are adequate
What is the outcome of alternative views within a firm’s selection committee about the best way to begin
Is the company willing to supply on a private label basis
Many other operational details
As CEO of Winning Brands, my responsibility is to the long term growth in the value of the company for its shareholders, not personal heroic posturing. If short term share price management were the objective, then perhaps the strategic thing to do would be to proceed with an announcement immediately so as to “prove the point” that Winning Brands is progressing in an impressive manner. That would be short term gain and long term pain because it would be a tactical error in our business relationships with such discussion partners. It would indicate that the company cares more about its PR than its substance. It is important that there is genuine accord on the operational details that define a long term mutually profitable relationship with substantial retailing partners so that it is in the interests of both parties to work together well into the future.
We have seen the most recent evidence of the merits of this “calm and sensible” approach to negotiations and announcements in the fact that Winning Colours® Stain Remover is now available at Wal-Mart in Canada – a business unit of the world’s largest retailer. This by itself was a breakthrough development. The fact that the company has earned this business relationship, as the most recent addition to an already respected retail team in Canada including Home Depot, Canadian Tire, Home Hardware and True Value shows that there is sufficient comfort amongst parties of this calibre when they get to know us.
I therefore respectfully advise shareholders that it is in our interest that Winning Brands not behave as if it is desperate for PR’s but rather that it has the self assurance as a negotiator to go about its business, advancing step by step in the development of a solid company that is a source of pride for all those associated with it. For this reason, it is a mistake to view a specific calendar date for such announcements as absolute. It is in the interests of shareholders that Winning Brands achieve equitable arrangements, because it will be living with those arrangements as a party that honours its contracts.
Eric Lehner, CEO
Winning Brands Corporation