Wednesday, June 15, 2016

Hastings Files Bankruptcy

Here are some more figures on the Hastings' bankruptcy. Indicating the popularing of  Funko's POP figures and the quantity of POP figures Hastings carries, the largest amount Hastings is to that company. For those not familiar with the others, Diamond is the primary supplier of comic books and graphic novels to stores, while ACD and PSI are both major distributors of boardgames, TCGs and RPGs to stores. Ultra Pro is one of the major manufacturers of card protection supplies.

It appears a major contributor to Hastings' bankruptcy is  a shift from a newsstand account for its comics to a direct account. A newsstand account is what Barnes & Noble and Wal-mart, and Hastings until the last year or so,  have for their comics and magazines. A newsstand account allows stores to bring in comics, keep them on the shelves for a certain period of time and return whatever does not sell for credit with the supplier. Stores with a direct account, such as our's, buy the comics outright and own them. The difference is profit margin. Stores with a direct account make more profit per book sold than do stores with a newsstand account. Hastings, likely seeing increased comic sales and wanting to make more profit per book, shifted accounts but kept centralized distribution, in effect sending the same quantity and selection of comics to every store in the chain.

This became a problem because not every store has the same target market. Some customer bases lean towards Marvel, some towards DC and some towards independent titles. In order to be successful, stores have to tailor their selection towards what the customer buys. This is why you see comparatively few independent titles on our shelves as sales indicate customers here don't purchase them. Hastings model did not tailor selections to the market and they built up backstock, which they did not have to deal with under their previous account and were not set up to deal with now. Unsold inventory means dollars tied up that cannot be spent on new merchandise or otherwise improving the store.