As we have reported over the last month, West Marine, America’s largest marine chandlery, filed a Chapter 11 Bankruptcy that will allow it to work with its creditors to reduce debt and to reorganize the company’s finances. How did the company get into this dire situation.
Craig Lewisk, editor and publisher of Scuttlebutt Sailing News, is a sailboat owner and a long-time customer at his local West Marine. Here’s his amusing and revealing take on issues that are driving the company toward failure.
I insert a thru-hull plug into my Alerion 28 hull when removing the speed/depth transducer, which is something I do to avoid barnacle growth on the paddlewheel. But I don’t do it enough, partly because it’s not easily accessible, and because the plug is broken. So, I wanted to remove one of my excuses.
The West Marine website indicated a replacement plug was in stock at my closest store. The sales rep confirmed this when looking at the online inventory, but after a few people searched for 30 minutes, they couldn’t find it. They looked several places, but no plug. They also admitted an online order wouldn’t be easy, and suggested I buy it from Defender. I did.
My excursion came after West Marine had filed for Chapter 11 bankruptcy, and I had to laugh at the latest update in which a Delaware bankruptcy judge had signed off on a plan which would leave the company’s unsecured creditors facing an almost total wipeout. Actually, that’s not the funny part, as their three largest creditors are owed $14 million. That sucks!
No, the funny part was near the end of the report which noted how West Marine’s financial plight was partly due to old technology for tracking inventory and an unreliable distribution center which resulted in lag times transferring items to stores. When their employees couldn’t help me, they helped their competition. And that’s how you bankrupt a company.
