Thursday, March 19, 2009

We are in business and in good shape

Giftco's closing will not affect our ability to provide strong fundraising programs for our client groups. Our two fall shoppers had a few Giftco-sourced items that will be replaced by other items. The "Snowflake Surprises" and "MacKenzie Collection" brochures continue to be very strong in their sell-through "at the door." The wrapping paper is partly from American Greetings and partly from Sullivan (supplier to "Sally") so the quality is excellent.

Our frozen food programs continue to excel. We have a new selection of baked goods, and continue to offer first-rate Wisconsin Cheeses, Sausages, and Chocolates. We still have strong flower bulb, jewelry, and candle programs.

As a company we are debt free and have a strong cash position. You can be assured of delivery of your products if you deal with us in the fall of 2009.

Major Supplier Giftco goes out of business

Giftco has closed.  With Scott's stopping imports, that leaves the entire fundraising industry without a supply of "stock" shopper catalogs.  Each regional or national company will now have to develop their own catalogs and find their own sources of goods.  The immediate result will likely be that at least a third of the local fundraising companies in the US will go out of business as the entire industry continues to contract.  

Here is a statement from a regional Giftco representative to his fundraising company customers:

Sadly and unfortunately Giftco has run into an obstacle that we cannot overcome.

As you are aware the banking climate in America today is at its worst in our lifetimes. We have been working toward refinancing the company with a new bank for many months. During that period of time we were convinced that an agreeable transaction was in the works. As in all of life no deal is done until it is finalized.  Over the last two days, in the final hours of negotiations stipulations were changed or added which made it impossible for Giftco to go forward.

As you are aware we had severely tightened our belts over the last 12 months and made many internal changes. The owners invested sizable additional funds into Giftco. Our outside partners were lined up to do so also. However, with the banks' new additional requirements, we are not in a position to continue.

The result of this is that Giftco will discontinue operations. This will be done through an orderly liquidation of assets and dissolution of the company.

We will make every effort to work with our customers to provide you with goods to service your schools. We have existing inventory to build kits of "In School Shoppe" merchandise. We have existing prize inventory. We have sizable inventories on many excellent "evergreen" products. These goods will be made available for purchase and immediate shipment over the next couple of weeks. We will be in contact with you to offer these opportunities.

We are both exasperated and devastated over this turn of events. We did not foresee this outcome as being a realistic possibility until the last few days. Over the last few days we have exhausted all known possibilities for the required funding. In any other banking climate Giftco would be viewed as a good client; in the current climate that is simply not the case.

 Regrettably we can only apologize that we will not be around to work with you in the future. 

Wednesday, March 18, 2009

Gift item availability questionable for fall 2009

The trend in fundraising is toward food, but wrapping paper is still
strong. As of today, the word "on the street" is that the major
importer of fundraising gift items has closed its doors--another
casualty of the current economic downturn and the banking crisis. The
other major importer announced several weeks ago that they would be
stopping their import business and concentrate on food items that they
product domestically.

Our fall shoppers are secure. We have 24 items to re-source from the
importer that closed its doors today, and that's already in the
works. This same importer was a major player in the holiday shop
market, but we use the "other" importer that is still going strong.
Our wrapping paper is all domestic--made by American Greetings and by
Sullivan. Our food items are all domestic.

So if you have been using someone else for your holiday shop or fall
fundraiser, call us instead. We've been in business for 22 years and
are debt free. We choose which schools and organizations we work with
based on their willingness to follow our plan for success. For us,
failure is not an option.

Our food programs continue to do well. They are all sourced on the
east coast, so that pricing buys more product quality and less in
transportation. Prices are locked in for several months, and our
retail prices are lower than those of most other companies.

The current economic situation is likely to put another several
hundred fundraising companies out of business. We are still here and
stand ready to help you with your fundraising needs for fall 2009.