Where You Always Get a Free Onion

[legion]

When I moved to Bloomington, there was a store called "Direct Factory Outlet" that sold cheap furniture at rock-bottom prices. Its commercials always ended with the line "where you always get a free onion".

Since I have been in Bloomington, this guy has, like clockwork, shut down his furniture business every two years and started a new one under a new name. He always does the commercials, and he almost always gives the onion line.

I wonder, is there any advantage to going out of business every two years?

The best I can think of is that he sells stuff at a loss or a near loss, and when it comes time to pay for the inventory (he's strung his suppliers along for as long as possible), he declares bankruptcy and starts a new furniture business.

Thoughts?

[red-beard]

Originally Posted by legion

When I moved to Bloomington, there was a store called "Direct Factory Outlet" that sold cheap furniture at rock-bottom prices. Its commercials always ended with the line "where you always get a free onion".

Since I have been in Bloomington, this guy has, like clockwork, shut down his furniture business every two years and started a new one under a new name. He always does the commercials, and he almost always gives the onion line.

I wonder, is there any advantage to going out of business every two years?

The best I can think of is that he sells stuff at a loss or a near loss, and when it comes time to pay for the inventory (he's strung his suppliers along for as long as possible), he declares bankruptcy and starts a new furniture business.

Thoughts?

Taxes, maybe? I can't imagine he is stinging suppliers every couple of years and then they sell to him under the new name. It has to be something else.

ps: 7000 to go!

[Hugh R]

Many states require that if you post a "Going out of business sale" that you actually go out of business. CA does.

[gr8fl4porsche]

Marketing 101. People think everything is on sale so they buy before its too late. Missouri had such a problem with this type of marketing that there is now has a law against it. If you say you are going out of business then you actually have to. There were furniture companies going out of business for years and kept restocking the shelves.

Furniture has a 100-500% markup. List everything half off and you are still making 50%.

My brother in law is a furniture dealer. I get everything at cost. My wife found an entertainment center she really liked listed at almost $5,000 at a local store, wholesale cost was around $1,100.

[the]

Originally Posted by legion

The best I can think of is that he sells stuff at a loss or a near loss, and when it comes time to pay for the inventory (he's strung his suppliers along for as long as possible), he declares bankruptcy and starts a new furniture business.

Thoughts?

He may go "out of business" in some technical manner, but I doubt he's filing a bky every 2 years.

[Eric 951]

A guy in knew in HS's dad did this with his mens clothing store--he closed and re-opened it under a different name 4 times in the same mall storefront. He was a bit of a conman.

[legion]

See, I don't see a lot of advertising around "going" out of business sales and the physical location of the store changes every two years, along with the name. Lately, he's taken to just mounting a banner-style sign on the store instead of a permanent sign.

[austin552]

There was a Unfinished Furniture store in Virginia Beach that had a Giant Going Out Of Business Sale for two years.

[GH85Carrera]

There is a furniture store here in OKC that was having a big sale because they were over-stocked. The warehouse was full and they were going to sell the furniture for "below cost." They used that same line for 10 years. They always had too much inventory and were always having a reduction sale. Year after year after year. I guess the moron that kept ordering so much finally retired or died. Have you ever once gone to jewelry store that was not having a big sale?

[JMatta]

Marketing..but I would like a free blooming onion (or whatever it's called).

[cgarr]

Actually very smart! He can have a "Going Out Of Business Sale" and a "Grand Opening Sale" all in the same week!

[rouxroux]

Hey, he just needs a little bit 'o "Sammy Stevens"

http://www.youtube.com/watch?v=FJ3oHpup-pk

or maybe even "Red House Furniture" or "Bobby Denning Furniture" (check youtube as well)