Kasen gives address at cataloger group after Best's filing - National Association of Catalog Showroom Merchandisers; Stewart M. Kasen

Discount Store News, Jan 21, 1991 by Mary Ellen Kelly

Kasen Gives Address At Cataloger Group After Best's Filing

CHICAGO -- Best Products president Stewart M. Kasen was the guest speaker at the annual banquet of the National Association of Catalog Showroom Merchandisers here Jan. 6, despite taking his company into Chapter 11 just 48 hours earlier.

Kasen told NACSM members that Best is awaiting court approval for $250 million debtor-in-possession (DIP) financing it has secured from Chemical Bank and Manufacturers Hanover Trust.

Speaking at the NACSM's annual banquet during the Housewares Exposition last week, Kasen said the $250 million from the banks would supplement the cataloger's current cash position, which is also $250 million.

Best Products filed for Chapter 11 protection on Jan. 4, two days before Kasen addressed NACSM, and less than a month after Best notified vendors it would need to suspend payments temporarily. The letter had caused some vendors to stop delivering merchandise to Best.

Kasen stressed that the Chapter 11 filing is, "not the end but the beginning," for Best. He attributed the financial struggles at Best to the current economic climate, the retailer's reduced credit line and the lack of vendor support which, in turn, led to merchandise shortages. He promised to provide Best suppliers with "a steady flow of financial information," during the restructuring period.

Like many NACSM banquet speakers during the past several years, Kasen said the current problems "are not an indictment of the catalog showroom industry." Kasen emphasized that the format is "viable, because our formula is correct . . . If we've stumbled along the way, it was because we forgot the formula or failed to execute it."

Unlike past banquet speakers, Kasen opened the floor for questions. Asked about the cataloger's inventory level, which Best had hoped to reduce by $40 million by the close of 1990, Kasen answered that inventory levels were "substantially lower" because some vendors discontinued shipments.

Despite the recent troubles, Kasen said expanded catalog pages and distribution combined with improved shopping environment and pricing has already resulted in "positive responses from customers."

The 22% increase in pages to 404 in Best's latest catalog and a 35% increase in the number of households which received the catalog to 7 million, is expected to help the retailer further build sales.

Last year, Best also refocused its merchandising to include three core groups: jewelry/giftware; housewares/home furnishings and home products (which includes consumer electronics, photo and luggage).

The firm has been struggling to restructure roughly $665 million in debt incurred from Adler & Shaykin's 1988 leveraged buyout of the cataloger.

PHOTO : Kasen: Best's current problems "are not an indictment of the catalog showroom industry."