Long Road to Recovery Getting Longer for Some

The continued run in the equity markets does little to help small to medium sized businesses in the United States desperately looking for credit.  With massive cuts still being made to credit facilities in the business and consumer sector overall spending ability of both groups has diminished.  Many firms will be able to recover as sales begin to increase during the summer but for many others the stranglehold of available credit is too much to bear.  Yesterday Norwood Promotional Products filed for Chapter 11 bankruptcy and with that two of the top five distributors in the industry are bankrupt or have plans for bankruptcy in May 2009.  With rumors swirling about at least one other major supplier the road to recovery for many just got longer.  What is even more troublesome is that distributors who have relied on these vendors will now have to attempt to establish credit lines with new vendors which is a tall order in this market.  Norwood blames a flood last year, the recession and inability to refinance debt as commercial paper markets are still very thin.  We do not expect this to be the last supplier to file.

Air travel has finally begun to level off after plunging for the past two years.  As travel begins to increase again this summer many business travelers will encounter tighter TSA restrictions that were not in place the last time they were on a plane.  To counter this suppliers have released TSA friendly products including the Aero-Safe Travel Kit which is compliant with guidelines.  The kit includes four bottles that allow someone to fill them with soaps, shampoos and other liquids while still being able to slip through screeners without having to dump your items.   The Aero-Fresh Travel Kit does essentially the same thing but instead actually includes shampoo, shaving cream and soap in individual packets of ten.   Both of these items get an imprinted on the front of the actual kit.    Another trend seen this spring is the increasing size of lighter laptops.  As a result customers now desire 17″ capacity which is why the Wenger Optimus Compu-Backpack provides the ability to carry a 17″ laptop while also including all of the features customers are looking for and some that they are not such as the carabiner which is a great addition.  Both this and the Wenger Transit Compu-Backpack have cell phone carriers on the backpack strap.  We would advise you to be careful in utilizing this though as out of sight behind your back is not the place you would want to place a highly valuable phone.    These are highly durable backpacks that carry the genuine Swiss Army brand name.  The travel kits are inexpensive and provide some real value.  People still have not adjusted to the changes in air travel regulations.  Handing a captive group of travelers either of these items will produce an immediate and permanent impact.

The economic miracle that is now an economic mirage for so many continues to fluctuate with each day.  On one hand there is positive news in terms of some bottoming in housing but on the other hand we have news that our major banks are still needing more money.  To our eyes that is terrible news as it will mean continued cuts in available credit which will only produce more “Norwoods” on both the distributor and supplier side of the industry.   About all anyone can do is continue to work hard to distinguish yourself from the competition by either putting some thunder into your message or by providing exceptional service.  The military uses a term “make it rain” when they call in the proverbial cavalry and that is where many businesses are today.  Sadly many will probably fall in the coming months.