Brad Snyder gives the lowdown
on retail going-out-of-business sales in appearance on Freakonomics
Radio Networks' 'The Economics of Everyday Things' podcast
NEW
YORK, Feb. 19, 2025 /PRNewswire/ -- The
Freakonomics Radio Network (FRN) turned to Tiger Group for insights
into "the going-out-of-business business."
Spurred by a spike in retail liquidations, FRN's "The Economics
of Everyday Things" podcast quizzed Tiger Group Executive Managing
Director Bradley W.
Snyder about what it takes to run an effective
going-out-of-business sale.
Host Zachary Crockett noted that
going-out-of-business sales, commonly known as GOBs, have been on
the upswing of late, with at least 51 major retailers filing for
bankruptcy in 2024, up from 25 a year earlier. "We're running sales
within an eight to 12-week sale term," Snyder told Crockett. "Our
job is to drive traffic as fast as we can. And I will tell you that
we've never been busier."
Colorado State University professor
Zac Rogers kicked off the discussion
(episode 80) by describing the role of inventory liquidations in
the retail ecosystem. "When a company like Toys 'R' Us files for
bankruptcy and decides to permanently close its doors, it has an
obligation to recover as much money as possible to pay off its
debts," the professor explained. "One way a retailer does this is
by selling off its inventory—all that stuff sitting on the shelves
at its stores and warehouses."
And that is when Tiger's expertise in merchandising, data
analytics and retail operations come in. Over the past 20 years,
the New York-based firm "has been
involved in practically every major liquidation or store-closing
project in North America," Snyder
told Crockett. The list includes Toys 'R' Us, Linens 'N Things,
Lord & Taylor, Nordstrom Canada
and Sears Canada, to name a few.
Snyder described to Crockett how Tiger estimates the overall
recovery for creditors, establishes initial pricing, and both plans
and markets GOBs. Tiger starts the liquidation process by running a
detailed analysis of the retailer's financials and inventory. This
can include store walk-throughs by professionals like Snyder.
"I stand at the front door and the first thing I look at is the
top shelves to see how crowded they are with products," he
explained. "If those are empty, then that tells me right away that
they're not getting shipped new goods."
To give the audience further context, Crockett explained that
"if a sale is managed successfully, it's a good way for a store to
go out in a blaze of glory." That means liquidation firms must make
sure "the store appears to be healthy and well-stocked… You don't
want customers seeing picked-over shelves and products scattered
all over the floor. In many cases, a liquidator will actually bring
in more inventory to protect against this."
Indeed, when liquidating supermarkets Tiger restocks perishables
around the perimeter, which can keep people coming in for longer
and drive higher sales of packaged and canned items in the center.
"But the most important part of getting people to buy things at a
going-out-of-business sale is knowing how much of a discount to
offer," Snyder said.
Overall, the liquidation process is so efficient that even store
furniture and fixtures will be sold in most GOBs. As Snyder
explained to Crockett, "There's never any merchandise left after a
sale."
The full podcast is available at:
https://freakonomics.com/podcast/going-out-of-business-sales/
Media Contacts: At Jaffe Communications,
Elisa Krantz, (908) 789-0700,
390453@email4pr.com.
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SOURCE Tiger Group
