Handleman Co. May Stumble In Kmart's Wake22 Jan, 2002 By: Hive News
Rack jobber Handleman Co. is the first company to admit it might take a temporary hit in the fallout from the Kmart bankruptcy."As Kmart represented 35 percent of Handleman's fiscal 2001 sales, the Company's third quarter results will be impacted as a result of the Kmart Chapter 11 filing," a spokesperson said. "Handleman Company, however, does not anticipate that this will have a major impact on its long-term profitability."
Handleman, which has managed the discounter's music category for more than 50 years and recently began managing the video stock on subsidiary bluelight.com, expects its accounts receivable balance from Kmart to exceed $50 million, but can't be sure of the exact number until January's holiday returns are tallied, a spokesman said.
"As we do with all of our customers, we're working closely with Kmart to do whatever is needed to help them accomplish their objectives," Handleman chairman and CEO Stephen Strome said. "Merchandise provided by Handleman Company to Kmart is highly visible to consumers and generally produce higher sales per square foot than other categories. We will make decisions that reflect our support of Kmart in addition to ensuring our Company's ongoing performance."
The implications of Kmart's decision to file Chapter 11 are still emerging.