Dealing with the Namco Bankruptcy

Thursday, August 1st, 2013

by Dennis DiPaolo

Though we didn’t mention their name; we warned you in the April Seasonal News that we were afraid of shortages this summer due to Namco’s being in chapter eleven bankruptcy.  It has been a chore for us, but not as bad as we feared.  Obviously, they were not about to tell us if their shortages were short-term or long-term, so we never knew if we were covering them for a month or a weekend.  Fortunately for them, they declared bankruptcy and closed half of their stores after the vendors shipped their opening orders.  That certainly helped; having twice as much in stock per store!

We ran higher than normal inventories and stocked up whenever we heard about their shortages.  We didn’t run out of any normal supplies all summer.

Parts for their pools, filters, pumps, and skimmers were another story.  We did our best, but we have much less of a track record.  Still, Patrick, Mia, and Stephanie did a great job learning what was needed.  They created a book with notes as we figured out what goes with what.  Remember, Namco uses mostly private labels that are exclusive to them, so it takes a lot of experience (and guessing) to figure out who made what and its actual model number.  Then we needed permission to buy it.  Those of you who brought in smart phone photos made it a lot easier.

Next year should be easier.  On July 11, they announced on their website that they have a survival plan and new financing.  They expect to have a confirmation hearing on August 1, 2013.  I seem to remember from the March court filing that everything had to be finished by mid-September.  There’s lots more information on the web.  As I write this, the July 11 announcement is on their website, and there is plenty more if you google “Namco Bankruptcy”.

I am happy to see them survive.  Certainly, they will be a much smaller company.  A lot of vendors I know will probably lose money.  Still, I would hate to see any more of their employees lose their jobs.  We met a lot of them looking to work here after the bankruptcy was announced in spring; let alone after all those stores closed for the winter.  Their employees were nice people.

As a competitor, I would have missed them. Under their previous owners (1962 to 1998 or so), their low prices kept our prices low.  Since then, it’s actually the internet that is our primary price competition.  Unfortunately for us, most people cannot see the quality and ingredient differences that we see.  That often leaves us selling high quality product for the price of a low quality product, just to make shoppers happy.

Many of us appreciate the amount of money that Namco spends on advertising.  It raises the awareness of all pool and patio stores.  Jeanne and I are able to pay more team members more money since we don’t have to spend an extra $300,000 a year on advertising.  We get by mostly on word-of-mouth and enough advertising to be the second place people shop.  So we can afford to keep people like Pat, Joe, and Tod for 16, 22, and 33 years, or Anne-Marie and Jim for 12 years.

While we are one of the largest pool and patio stores in the country, it wasn’t because we tried to become the biggest.  It was a side effect of trying to work with the kind of people that makes it a pleasure to go to work every day.

So we wish Namco and its employees the best of luck in the future, and we hope to see their stores looking more full and cheerful next year.  Most of all keep running all those advertisements!