I spoke to a banker the other day who said the Friedman’s case showed “a change of thinking” at the wholesale level.
“It shows the trade is saying we’ve had enough, that we’re not going to just take [BS] from the retailers anymore,” this banker said.
Before Christmas, Friedman’s execs were said to be talking with their vendors, trying to make a deal. Instead, the company’s major vendors tried to force it into Chapter 7. That has been converted to a Chapter 11 filling.
I should note that another banker I spoke to said that, if Friedman’s offered them a good enough deal, the vendors probably would have taken it. But it’s an interesting development. The fact that Friedman’s had gone Chapter 11 before possibly played a role in the vendors’ state of mind. It will be interesting to see if more vendors play this kind of hardball.
FYI, top Friedmans’ creditors include: Sumit ($7.5 million), Rosy Blue ($6.2 million), Masterpiece Diamond ($3.6 million), NEW Customer Service ($2.5 million), Verigold ($2.2 million), Paul Winston/Eurostar ($1.8 million), and Andin ($1.5 million.)
This article provides an interesting (if opinionated) outlook for jewelry chains in 2008.