dfafereedShipment to Obermeyer Warehouse
During June and July, Obermeyer garments were transported by ship from Obersport's Hong Kong warehouse to Seattle, from which they were trucked to Obermeyer's Denver distribution center. (Total shipment time was approximately six weeks.) Most goods produced in August were air- shipped to Denver to ensure timely delivery to retailers. In addition, for goods manufactured in China, air freighting was often essential due to strict quota restrictions in certain product categories. The U.S. government limited the number of units that could be imported from China into the United States. Government officials at the U.S. port of entry reviewed imports; products violating quota restrictions were sent back to the country of origin. Since quota restrictions were imposed on the total amount of a product category all companies imported from China, individual companies often rushed to get their products into the country before other firms had "used up" the available quota.
Shipment to Retail; Retail Replenishment Orders
Toward the end of August, Obermeyer shipped orders to retailers via small-package carriers such as UPS. Retail sales built gradually during September, October, and November, peaking in December and January. By December or January, retailers who identified items of which they expected to sell more than they currently had in stock often requested replenishment of those items from Obermeyer. This demand was filled if Obermeyer had the item in stock.
By February Obermeyer started to offer replenishment items to retailers at a discount. Similarly, retailers started marking down prices on remaining stock in an attempt to clear their shelves by the end of the season. As the season progressed, retailers offered deeper discounts; items remaining at the end of the season were held over to the following year and sold at a loss. Obermeyer used a variety of methods to liquidate inventory at year-end, including selling large...