Possibly losing WALMART really says a lot to me about the future of this company. I find it incredibly misleading to see that the WNBD I-Box on here still has 320 CANADIAN WALMARTS under the heading "IT'S ON THE SHELF" when I thought 1. Winning Colours never really was in all of the Walmarts there and 2. That the Walmarts that did carry the product supposedly clearanced out all of the Winning Colours and no longer have any of it on the shelf, have not placed any new reorders, and that there relationship with Winning Brands is up in the air waiting on further negotiations according to this memo below and again mentioned in one of the last CEO CC. In my opinion, this WALMART debacle with all the other failed or delayed follow-throughs has shaken the shareholders confidence to the point of giving up on this company with dismal sales and high deficits.
From: Eric Lehner [mailto:eric@winningbrands.ca]
Sent: Friday, June 25, 2010 4:47 PM
To: Moderator
Subject: RE: WalMart Rumor
Hello Moderator Team -
Walmart Canada originally placed Winning Colours into approximately half of their stores on a trial basis. That trial period continued to be extended because Winning Colours demonstrated improving turnover on a period-over-period basis, and in almost all participating stores – from a standing start. In other words, we went from zero to eventually having thousands of Walmart shoppers purchasing Winning Colours at this banner, and asking for it by name. All the trend lines are positive. The buyer who was originally in charge indicated the desire to expand Winning Colours into all stores because of these positive leading indicators. A new buyer is now in charge, and has proposed new rules for the listing, including price adjustments and operational concessions. If we agree to these, it would prevent us from being even-handed with other Canadian national retailers (because the proposed concessions would not be sustainable across all accounts) and thus create a downward spiral. My position is that I would rather withdraw from a single account than undermine an established and accepted pricing/operational protocol that is satisfactory to everyone else. Accordingly, a meeting date has been established for later in July at which these issues of principle will be discussed in the context of a formal review. It would not be in anyone’s interest if a single buyer were to set policy for this brand for North America. I must therefore accept the possibility that conditions will emerge that will not be considered mutually beneficial. There has been no material development at this time that requires a News Release. I am merely confirming for the record that Winning Brands has a portfolio of retail partners, large and small, and has a commitment to its future success across many categories of trade with partners who are able to accept a common understanding of our mutual needs. This, as a matter of policy, requires the ability to charge fair prices, operate to viable conditions and retain sufficient authority over one’s own brand that the company is never overly reliant upon a single account. The measure of the value and wellbeing of a company is not only in what is says yes to, but also in what it is prepared to say no to.
You are also correct in stating that the “paint section” is just one of several in which we have a natural home (such as the Cleaning Department, Automotive Department, Pet Supplies, etc.) These departments are managed by professionals with their own specific business plans, within a larger context of factors at work within the retailer (and any large retailer) as a whole.
Bottom line: Still a dynamic situation that contains the seeds of change, but is not formalized to us (or by us) in writing, one way or another, at the present.
Eric Lehner, CEO
WinningBrands.com
