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WizKids Distributor Reactions

To Being Cut Off for Exclusive

Published: 01/12/2007 12:00am

Fourteen companies in the U.S. and Canada were terminated as WizKids distributors on Thursday as WizKids moved to exclusive distribution to the hobby channel through Diamond/Alliance.  We talked to four of the largest of those companies to get their reactions.  For obvious reasons, none of them were happy about the move.  Although their comments varied, there were common elements in many of the conversations. 

 

None of the distributors we contacted felt that the change would benefit WizKids' sales.  'I honestly believe that a lot of retailers will stop carrying the line because they don't want to promote exclusivity,' ACD COO Danny Procell told us. 

 

'I don't think it's going to help them,' Blackhawk CEO Kim Kowalewski said.  'It will make WizKids products a little more inaccessible and I think there's enough of an independent spirit in the game industry that it will hurt them.' 

 

All noted that the effect on their businesses would have been a lot more dramatic a couple of years ago, when WizKids' sales were flying high.  Only one of the companies ranked WizKids as its second largest supplier; the other three said that WizKids ranked in positions between #4 and #6 in volume.  'This seems like a move made out of desperation,' GTS Distribution Director of Entertainment Barry Calhoun said, referring to the context of WizKids sales trends. 

 

The timing of the move seemed to have been made after a gap in WizKids shipments, when money owed to WizKids by distributors was at a minimum.  Two of the distributors we contacted said they were actually owed money by WizKids (presumably because of returns), rather than vice versa. 

 

Three of the four distributors, ACD, Blackhawk, and a company that wanted to remain anonymous, had already made the decision not to handle WizKids products for which they had taken orders.  One, GTS, was contacting its customers before making a decision on the question. 

 

The general tone of the reaction was extremely negative.  'We're very surprised and very disappointed,' Calhoun said, vowing to push competitive CMGs in the future.

 

Kowalewski had a similar reaction.  'Their (retailers') choice is being taken away and they're being forced to buy from a distributor they didn't choose,' he said.  'We are actively encouraging retailers to tell their customers of all of the options they have for gaming.  If retailers value the autonomy of their own businesses, then what they should be doing is actively promoting other game products to their customers.'

 

The loss of choice was also noted by another distributor, who wished to remain anonymous.  'Retailers are businessmen enough to decide who to buy the product from,' he said.  'They don't need a manufacturer to tell them who to choose.'

 

The management of ACD, until last year WizKids' largest hobby distributor, called the action a 'slap in the face.'  'WizKids is showing no loyalty to a company that supported them from the beginning, took risks on their unproven products, and took an initial financial risk to the tune of over a quarter million dollars,' CEO Rich Kummer said of ACD and its early support.  'Instead they are going with a company that passed on them at the beginning.'

 
 
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