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1.) A peacock today, a feather duster
tomorrow.
With thousands of small, under-capitalized
companies, the sporting goods industry is volatile.
Financial distress brings closeouts. See above.
2.) Mistakes.
Ordered leather. Got synthetic. Needed boxed.
Got bulk. Wanted black. Got navy. The
manufacturer
got them back. We buy them cheap.
3.) “Thank you Philip Knight”
Nike invented futures. Many companies now book
orders two years ahead. Who’s that smart?
Economic
woes. Retail bankruptcies. Shifting tastes.
These cause many huge closeouts. (Not just Nike.)
4.) Downsizing.
We don’t mean people. Product lines often grow
in complexity beyond need. As inventories grow,
product lines get trimmed resulting in closeouts of
nice stuff. Often last year’s best.
5.) Who wears #23 now?
Trades, retirements and brand switching among
athletes obsoletes their endorsed products. The
goods remain the same, but can’t be sold at full
price anymore. (You remember #23? He played
for the Bulls.)
6.) “Just found them in our warehouse.”
Did you ever fi nd something you thought was
gone? You don’t need a large warehouse to
“lose” something. The larger the company, the
more surprises turn up–closeouts.
7.) Sports Strikes.
Hurt sales. Manufacturers get stuck with excess
inventories. Best sellers became closeouts in the
rush to dump.
8.) A Cold Summer. A Warm Winter.
El nino weather changes adversely affected sales
in golf and skiing. The result was excess inventory
and prime closeouts.
9.) Too many chefs spoil the stew!
When snowboarding boomed onto the slopes, it
quickly grew to 50% of the ski business. Hundreds
of manufacturers jumped into the fray. Suddenly
there were more ’boards than ’boarders resulting
in two glorious years of closeouts.

It’s simple. Sooner or later, we all sell something at a loss.
There are endless reasons for the flow of closeouts.
In a good economy, companies produce too much.
In a poor economy, cash is needed more than old inventory.
There are always closeouts.
Here is a list of a few of the causes I’ve experienced over the years.
Many are still relevant today:

10.) Mergers/Buyouts.
Happens all the time in our industry. When both
companies have similar products, redundant
items become closeouts.
11.) “Have I got a deal for you!”
Suppose you’re a manufacturer. You want to
sell to a large chain. They already carry your
competitor’s line. They don’t need both. The deal
is, you buy-back their products to sell them yours.
Guess what you do with these items?
12.) A capricious U.S. Customs?
Slow factories? Delayed shipping? Sports are
seasonal. Most are imported. Delays become
closeouts.
13.) Luck.
14.) Exuberance!
Sales told production, “We’re up 10% this year
and we’re going to be up 10% next year.” I love
this thinking. Heavy sales forecasts often produce
closeouts.
15.) A secret! You’re not supposed to know.
(If a company is short of sales goals and it’s end
of year...sometimes...they’ll take a hit to make a
fast sale.) Can’t tell you who.
16.) Uh-Oh! Nike just moved in.
Would you like to compete with them? Nike’s entrance
into golf, soccer, and football has driven
even strong manufacturers to discontinue and
closeout select products.
17.) The Olympics. The World Cup. The Final
Four...
Premium and logo over-runs are par for the
course. After any major event, there’s a fl ood of
closeouts.
18.) Technology Overload.
Used to be just wood bats. Then came aluminum.
Followed by succeedingly lighter, stronger, faster,
more powerful aircraft and space age aluminum
blends. CU-31 followed by C405, C555,
SC500, Z-Core, C777 and...are you confused? I
like confusion. It causes closeouts.
19....) and plenty more!