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Why you couldn't get an HDTV
If there wasn't a high-def set under your tree this year, it might be Wal-Mart's fault.
January 4, 2005: 7:35 AM EST
By Parija Bhatnagar, CNN/Money staff writer

NEW YORK (CNN/Money) - The way that iPods, digital cameras, DVD players and the Xbox supposedly flew off the shelves, you'd think that consumer electronics had banner holiday sales.

But at least one retail outfit said it's seeing a post-season glut in gadgets and gizmos.

Patrick Byrne, CEO of online "closeout" retailer (Research), which gets most of its inventory from manufacturers stuck with overproduction, said he's been besieged with calls from retailers and manufacturers trying to offload excess holiday inventory.

Not that he's complaining. Byrne expects's sales for the period to jump by as much as 60 percent over the same period last year, in line with analysts' estimates.

What's the excess in?

Curiously enough, it's in an abundance of consumer electronics such as digital cameras and TVs -- which the Consumer Electronics Association back in November had pegged as the No. 1 desired gift item this year.

Said Byrne, "We recently received a 10,000 block unit of digital cameras and digital stereos. One category that we hadn't anticipated seeing such a big surplus in was high-definition TVs. We obtained an unusually large deal of some 2,700 HDTVs."

Byrne declined to name the TVs' suppliers, citing business confidentiality. However, the company's Web site highlights a 40 percent off promotion on the RCA 20-inch LCD HDTV.

Part of the problem this year, Byrne explained, was manufacturers bought into the pre-holiday hype that electronics would be the most sought-after gifts.

"Sometimes when everybody says they expect a product to sell very well, manufacturers get excited and make all that they can. Then, they overshoot the mark," he said.

Blame Wal-Mart

A bigger issue may be the world's largest retailer, Wal-Mart. It seems when Wal-Mart delays, everybody pays.

Byrne said he first became aware of a potential industrywide supply issue in August when a few of's retail customers pointed out that the No. 1 retail chain, fearing a spending slowdown in coming months, asked its suppliers in Asia to slow down shipments to the United States.

Ships and warehouses handling Wal-Mart cargo also handle cargoes for other retailers. When Wal-Mart asked its suppliers and carriers to slow down deliveries, it affected cargoes sharing the ride and facilities with the No. 1 retailer as well.

"We definitely have taken a hit because of these overseas delays and port problems," said one supplier of consumer electronics, who spoke to CNN/Money on condition of anonymity

"The traffic jam caused by Wal-Mart's late shipments delayed our cargo by a couple of weeks," he said. "Some of our retail customers canceled their orders because we couldn't get it to them on time. We're now offloading it to places like and other channels."

Wal-Mart, which accounts for about 10 percent of total U.S imports, said it was looking into its logistics but wouldn't immediately comment about its shipping moves and their presumed effect on other consumer chains. Retail watchers, though, think the scenario is logical.

"It would make sense that Wal-Mart would be cautious about over-ordering inventory at a time when they expected sales in coming months to possibly be below forecasts," said Richard Hastings, an independent retail analyst. "Wal-Mart can afford only so much markdown without hurting the bottom line."

The snarled traffic was particularly acute at Los Angeles and Long Beach, a port complex that handles one-third of all U.S. imports, according to Art Wong, acting director of communications with the Port of Long Beach, California.

Contrary to typical seasonal patterns, Wong said the Long Beach Port this year did not see very busy August, September and October months just ahead of the holidays. Instead, November saw a record number of shipments.

"There were general delays overall and not only for Wal-Mart," Wong said, "Conceivably, this could have affected other importers who had incoming cargo on the same ships."

With ships backed up in the harbor as late as November, Wong said port workers could not unload cargo even for those suppliers who did get their holiday inventory on time.

"As the backlog grew, the ports as well as the railroad companies like Union Pacific and Burlington Northern that distribute the cargo nationwide for suppliers and retailers were struggling with labor issues because there wasn't enough manpower to first clear all cargo build-up from the port and then load it onto the trains," said Wong.

Attempts to reach a few of's competitors were unsuccessful.

Some industry watchers, however, suggested claims of excess inventory in consumer electronics may be overblown.

"LCD and flatscreen TVs sold very well as far as I can tell, although there always are individual items that would have performed poorly," said Stephen Baker, analyst with NPD Techworld. "The RCA flatscreen model that's selling on is a smaller model of HDTV. That category already has numerous models and is pretty competitive."

That may be, but's HDTVs aren't limited to just smaller models. A few other choices include 32-inch Sharp LCD HDTVs and Toshiba 42-inch HD plasma televisions.

"Even if there is an oversupply of flatscreen TVs now, demand should pick up again ahead of the SuperBowl. So it would make sense for suppliers to hold on to the inventory through January instead of offloading it in a hurry," Baker added.  Top of page

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