Norman is also considering taking the previous owner to small claims court to settle another issue: The partners made an asset acquisition of the store, paying a certain price for each "asset" in it, but some aren't matching up in terms of what was what was paid versus their worth. She's finding more and more merchandise items where the original seller may have inflated the values.
One example is the line of
figurines. Norman says the items do not sell well in her store, yet she has a large inventory of them, which she will likely donate to charity for the tax write-off.
There are also invitation sample booklets. "In our contract those books are listed, and listed with a value," she says. "When we took over and called the vendors, at least one-third of the books were discontinued. So they have no value. A discontinued book is garbage."
Norman says the lesson she's learning from valuation experience is that they should have been more diligent before signing the contract and held some of the money they were expected to pay in escrow so they could verify the merchandise values once they were involved in the daily management.
"We needed to do a little more due diligence in terms of what was in the basement, in terms of what we were purchasing. We gave a cursory glance of boxes and stuff and lists, but I don't think that we really did enough. The purchase price should have been lower."
"But on the flip side we really want this store. We wanted this location. Certain things are not worth fighting for," she says.
Next month we'll look at how Card$mart did during the busy Valentine's Day season.
So far Norman says that while women are coming in to do their Valentine's Day shopping ahead of time, men are not. She worries that if there is a freak blizzard in the unseasonably mild New York winter, Valentine's Day could be a wipeout for last-minute shoppers.
"We're hoping the mild weather continues and we do well on Valentine's Day," she says.
-- Written by Laurie Kulikowski in New York.
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