Zalemark Holding Co Inc (ZMRK)

[fact-checker]

Retail-101: why-didn't $ZMRK get-any major-retailers to-purchase Crayola product?

Retailers need a vendor that they know will be around to "help" them if the product doesn't sell. That means, taking back the product that didn't perform or giving the retailer "mark-down dollars" so they can reduce the retails, or exchanging the poor selling styles for newer, fresher merchandise.

But you first have to have product that is so compelling that the consumers want to buy it. The Crayola product didn't have the appeal to get it in the showcases of those major retailers. And obviously the M&M jewelry was received in the same way.

It's a lose-lose situation. A company that is too deep in debt so that retailers have no confidence in Zalemark being around long term and the product wasn't exciting enough for any major retailer to even test it. Not to mention being associated with the drug dealing Steven Zale, who also plead guilty to the embezzlement charges.

The branding concept can work if you have deep enough pockets to fund the promotions you need to establish the brand as a terrific new jewelry supplier AND you need great looking product. Crayola, M&M's and Zalemark have none of these elements.

But now Zalemark is saddled with minimum quarterly payments they have to make to Crayola and M&M's. And there are no sales or profits to do this. Only continuing losses. My guess is that both Crayola and M&M's will cancel the licenses based on "default". Default in both performance and payments.