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Web Sites ‘Out’ Deadbeat Stores

Vendors are anonymously posting their gripes about retail accounts on sites like Retaildish.com.

Vendors are turning to the Internet to vent their frustration with slow-paying or nonpaying retail accounts.

This story first appeared in the February 16, 2009 issue of WWD.  Subscribe Today.

Web sites are “outing” retailers with bad business practices, and manufacturers are using the public forums to shame stores into paying their bills or steer clear of stores with bad online reputations. Not surprisingly, stores are less than appreciative of these critiques — particularly since many of them are anonymous.

Retailers have long been accused of making late payments, requesting unearned discounts and bouncing deliveries back to vendors for minor offenses. In today’s economic environment, with many stores fighting for survival, the concern among vendors is getting paid at all.

Retaildish.com consists of a database of stores ranked by scores posted by users. For example, a post by “Stevie” claimed that doing business with Intermix “hurt. We made merchandise just for them and they took it in. Their check bounced and then they had the audacity to return the merchandise after three months. It almost put us under.”

After perusing the site, Khajak Keledjian, chief executive officer and cofounder of Intermix, said, “Anyone can write whatever they want, not give their name or affiliation.…Clearly, it is not a reliable source for designers to be doing their research on retailers. Who knows the motivations behind the comments? Of course we haven’t bounced checks.”

Postings about That Look, with three locations in New Jersey, included, “They do return goods frequently. I am doing business with them but it’s not fun.” Another poster said That Look “demands a discount for 60-day terms. They’re never happy with the merchandise. A very difficult customer.”

Owner Susan Consalvo said the charges are “completely unjustified and unsubstantiated.” Consalvo, who was familiar with the Web site and its postings about her stores, said, “Nobody likes to see their name tarnished. It’s just like a crying post to whine,” she said of the site. “It’s not a true barometer” of a retailer’s business practices.

Retailbeef.com is an anonymous blog created for up-and-coming designers to share information about retailers, both positive and negative. The blog’s author is not named, but identified as a designer. “My goal is to promote awareness of the bad seeds in our industry,” the designer writes.

Kim Leone Olenicoff, an attorney, and Ali Sedaghat, who has designed urbanwear and clubwear, launched VendorProtector.com a year and a half ago. “We love dealing with the small boutiques but got sick of dealing with the payment and collection side,” Leone Olenicoff said. “They’re [retailers] struggling. We understand. But it’s not right for them to place big orders at shows and cancel them.”

Leone Olenicoff said the idea behind VendorProtector is “to be like a Zagat guide for the fashion industry.” She also offers mediation services for $75 an hour or a percentage of the recovered amount, whichever is lower. “Most small and medium manufacturers don’t have the time and money to even go to small claims court,” she said. “A big store will challenge the court’s jurisdiction. If a retailer is struggling or going out of business, how are you going to collect?”