At long last we have released our full 2015 Retail Trends Report.
For the full printed report please CLICK HERE.

Retail Trends and Planning Report 2015
By Gary A. Wright

The Economy

Holiday sales in stores should be on track for an increase of 4% over last year.
Consumers are in better shape financially. A declining unemployment rate and rising incomes are improving consumer confidence. Consumer debt is down and net worth resulting from a rising stock market and higher home values is up. Interest rates are still very low. The decline in prices of gas and heating oil will provide extra disposable income. And, pent-up demand will motivate consumers to spend more money this year.

Next year in 2015 we should see continued growth at a faster pace than 2014. The economy continues to recover. Overall leading indicators are trending up.Expect the Gross Domestic Product to be up 3.5% in 2015 from 2014.

Consumer sentiment is rising but is still considerably below previous levels in both 2000 and 2007.  Inflation will advance but stay relatively low giving the Federal Reserve the latitude to keep interest rates low. Interest rates are expected to remain at current levels until the middle of 2015 when a slow rise is likely.

The value of the dollar is strengthening. This is resulting from economic expansion in the United States and relative weakness in many foreign markets. A strong dollar may result in opportunities for better pricing on foreign sourced goods.

Continued economic expansion makes businesses optimistic about the future. High profits have resulted in the accumulation of excess cash. Borrowing costs are still at record lows but executives also see an end to low rates. These conditions have combined to make improvements and capital spending now look prudent even though current sales may not justify the investment.

Economic conditions have tended to favor big business and are relatively more difficult for small business, less able to deal with new regulation, higher taxes and the health care law. Small businesses with less than 500 employees historically contribute all net new employment growth. The number of business start-ups has been declining in recent years. This is an indication of longer term challenges for the economy.

Trends that may hold back the expansion in retail sales are; rising healthcare costs, rising rents and mortgages, underemployment, slow wage gains, rising food prices and demographics. Demographic trends will be discussed more extensively later in this report.

Government spending is currently slowing. However, government spending will begin to grow again in the years ahead unless entitlement spending is curtailed.

The number of retired people is climbing. As workers retire their incomes decline, they reduce expenditures and begin to draw on entitlement programs. This problem will gain steam as the number of baby-boomers leaving the workforce accelerates. By 2029 it is likely to create a severe crisis. For the next few years, however, the economy should continue to grow.

Of course, several developments could derail this recovery. These may include inflation causing the Federal Reserve to raise interest rates rapidly, a larger than anticipated stock market correction, escalation of problems in the Middle East or Ukraine, an economic crisis in China or some completely unpredictable event. While these don’t currently seem likely, the risk is always present.

Retail Overview

The retail business is changing constantly. Large chain retailers have been closing stores at an accelerated pace. Closings are driven by consumer demand. Internet shopping is one driving force. Changing demographics is another. Overall shopper traffic in retail stores is down about 5%.

Many large retailers stock a popular item in the store but refer customers to their website to view other similar items. Of course, this moves a customer onto the Internet where there are any number of options available and an even greater selection from multiple competitors. So, is the referral of the customer to a company website really enhancing the inclination to shop the Internet first, look at the competition and go to the store as a last resort?

The fact that some Internet companies can avoid charging sales tax is another incentive for consumers to shop online.

The price check program offered by Amazon is allowing consumers to check competitive prices in the store just by scanning a bar code with a cell phone. Then the customer not only checks price but looks at product ratings. This is discouraging many in-store purchases. Other price comparison sites are Nextag and PriceGrabber.

The importance of brick and mortar may be demonstrated by Amazon opening it’s first physical store location in New York City. They seem to recognize the importance of a face-to-face relationship with the customer and the many other advantages of a traditional store. Expect other Internet retailers to begin opening stores.

A number of retailers are now experimenting with allowing customers in-store pick up of orders placed online. The store is the most powerful selling environment. Using the Internet as a tool to build store traffic is a viable strategy.

Demographic shifts in society are having a far reaching impact on the economy and retail. The Baby Boom generation, born between 1946 and 1964, is retiring at the rate of 10,000 per day. This is still the largest generation.

As people age they tend to become more diverse in their lifestyle choices. They are less influenced by fads and mass market advertising than are younger consumers. They need fewer products since they are well past the household formation period of life when they needed everything at once. This results in market segmentation and reduces the influence of the mass market retailer.

Baby Boom retirements will not peak until the period between 2023 and 2029. Today the majority of this generation are still working, at the peak of their careers and are relatively wealthy, compared to the following generations. Their children are out of school and on their own. They’re moving from the suburbs into or near cities. Their expenditures in stores tend to be for higher quality products and service. This is resulting in a shift in opportunity for small retailers who are service oriented, sell high quality products, cater to a market niche and are in or around cities.

The Baby Boom is a wealthy generation but still worried about having enough money to last through their lifetime. As they retire and lose income they understandably reduce expenditures in retail stores. Expenditures in retirement tend to be for healthcare, travel, entertainment, eating out, and services rather than products.

By 2029 the majority of Baby Boomers will be retired but still alive causing a big problem for entitlement programs. Society will be faced with higher taxes, fewer entitlements or both and, of course, less will be available for consumption of consumer products.

Generation X, the baby bust generation born between 1964 and 1982, is significantly smaller and less wealthy. Their careers are peaking as they take over the top jobs from Baby Boomers but there are not nearly as many of them. They cannot be expected to replace sales lost as the previous generation stops spending. They are also worried about supporting the Baby Boom generation and not having enough for their own retirement. By 2030 there are projected to be only two working Americans for each person in retirement. In 1960 it was five working for each in retirement.

Generation Y, the Millennial Generation, born from 1982 to 2000, are slower to marry, slower to move out of parent’s households, slower to get jobs and more likely to have one parent households than earlier generations. This is a large generation. It is slightly larger than the Baby Boom, more tech savvy and likely to take advantage of the Internet for shopping. This generation is beginning to move into peak consumption years but is unlikely to replace sales in brick and mortar stores of past generations. It is producing babies and this will fuel growth in the children’s business for many years to come.

We are becoming a more racially mixed society. By 2060 estimates indicate the country will be only 43% white. Immigration rates are high and immigrants are generally less educated and affluent. However, it is interesting that the average income of Asians surpasses that of Caucasians. The number of interracial marriages is growing and becoming accepted in all parts of society. This is having an impact on retailers as they must adjust to growing diversity or pursue a focused niche in a diverse society.

An objective look at demographics leads to the conclusion that the market environment for brick and mortar retailers may be as good today as we can expect for a number of years to come. We have a window of opportunity that is likely to close as we begin to get near the time of peak Baby Boom retirements about 2026.

Copyright 2014 G.A Wright Sales, Inc.

www.gawrightsales.com

Retail Trends Report 2015

 

To see more  about Retail Trends by Classification please order you FREE copy HERE.

We can email a PDF  to you if you call 303-333-4453 and give us your email (your email will be kept confidential)

 

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Many of our clients will tell you how skeptical they were going into a Going Out of Business Sale using a professional liquidation company. G.A. Wright Sales Inc. works with retail business owners and their employees to create a safe and professional selling environment allowing retailers to Exit the Retail Industry with dignity. We give retailers the time and ease of being able to concentrate on saying good-bye to their customers and their community. Use of a G.A. Wright consultant will produce a maximum return at minimum expense, reducing potential losses from excessive markdowns, ineffective advertising, excessive expenses, or a loss of momentum. The retail consultant brings three essential elements to the implementation of the G.A. Wright Program in a client’s store. These are a tailored marketing plan, experience and management expertise. Consultants are very carefully selected for their retail experience and ability. They come from a broad cross section of both general and specialty retail backgrounds. They are screened and are referred based upon their unique expertise, retail experience and the needs of our client. Then their performance is carefully monitored though reports from our clients to insure that they are producing high-impact sales results. Only those with a consistent record of successful sales and happy clients who have testified to their superior performance continue to be referred. If you need a reason Why Retailers Should Hire a Liquidation Company please read the reference letter from a recent client after their 2nd sale with G.A Wright.

Review for G.A Wright Sales Inc Store Closing Programs

Review for G.A Wright Sales Inc Store Closing Programs

This letter Reads: “It’s still hard to believe that after 42 years in business that the owner has decided to retire and leave the business to me. This decision came with a lot of serious thought and considerations. One of the main concerns was who to trust with such a major responsibility as a retirement/inventory reduction sale. Twelve years ago we had an anniversary sale with GA Wright that was very successful. So needless to say our minds were already made up.

We all know that the stagnate economy has forced many people into selling their gold and silver jewelry, and their coins and bullion. Our store image went from a well known coin and jewelry store to a pawn shop. Our inventory had tripled but our jewelry sales had almost diminished.

G.A Wright consultants planned an amazing sales strategy during Christmas of 2013. This helped to optimize our sales during a time that people were almost guaranteed to spend money. This Christmas was more like the “Good Ole Days” when people used to patronize the locally owned businesses. Our sale volume nearly tripled and the stores’ traffic was beyond our imagination.

The last 5 years we had lost our original customer base. This sale has enabled us to have an up-to-date customer list which can be used for future mailings for special events and sales.

G.A Wright and their consultants are very professional and they care about the image of the store and its’ owners. This has been a very positive experience and I would recommend G.A Wright to any of my colleagues.”

G.A Wright Client Tracy Steverson Coin & Bullion Reserves

Store Closing Information Packet

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Overview: Bill Hughes, owner of Kathie’s Christmas Gifts & Collectibles talks about using the services of G.A. Wright to reduce his large level of inventory. The inventory consists mainly of Christmas gifts and décor as well as art and collectibles for any occasion. Because the store has so many unique one-of-a kind items such as crystal ornaments, figurines and art work, they consistently ran into overstock problems. Bill sought the expertise of G.A. Wright over 10 years ago and now turns to a professional retail consultant every time he needs to run a Cash Raising Sale or Overstock Reduction Sale. In fact a year after this video was taken, Bill and his wife made the decision to retire so they can spend more time with their grand kids, and once again he turned to G.A. Wright for his final Sale. See Bill’s Retirement Sale Video HERE

The Promotional Sale: Bill’s promotional sale started in the fall and lasted 7 weeks. In the past Bill retained G.A. Wright services to conduct inventory reduction sales or inventory leveling sales on specific categories of merchandise. For this third sale G.A. Wright was retained to conduct a huge store-wide promotion to help create awareness in a slow retail economy, attract new customers and liquidate merchandise that wasn’t selling. The first day people were lined up around the building waiting to get in and buy. First days sales totaled more than they had done in a month’s time. Each day new customers came in and high sales volume was sustained throughout the sales event.

Comments by owner

“I had been getting mailings from a place called G.A Wright and I gave them a call, they sent somebody in who took a look at the situation and said absolutely they would know how run the perfect sale for Kathie’s Christmas & Collectibles… so next thing we knew we signed up for what I think at that time was a 9 ½ week sale G.A. Wright came in, the consultant arrived, and boy did they run a sale!”

“ We’ve been wonderfully successful for 31 years, but anytime we need to run a sale we know to pick up the phone, call G.A. Wright and we know they’re going to run a sale like nothing we have ever experienced or nothing that you will ever see or experience unless you try it.”

“G.A. Wright Inc.’s program under the direction of our professional and knowledgeable consultant was very effective at producing such an outstanding sale. Our consultant worked very close with us and our employees, thus we were able to achieve our goal.”

Complete packet of information about G.A. Wright:

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This is an excerpt from our upcoming Retail Trends Report that will be published in December. Please CLICK HERE to get on our mailing list for the full report:

Economic Trends for Retail Music Stores: Music stores selling instruments, sheet music and supplies are experiencing industry consolidation where category dominant retailers are pushing independents out of the market. A large percentage of sales is going to lower priced and imported products. Chains like Guitar Center are dominating many markets.

Independent stores must rely on high end quality equipment, repair services, music lessons, equipment rental and personalized service. There are still a large number of independents in the market. These stores can survive but must have a significant competitive advantage. Quality, service and expertise are the critical components of competitive advantage.

The Internet has been a big competitor. Customers find the product they want in the store, try it out and then go to the Internet to find the best price. Even band instruments are now being rented online. However, on the upper end of the market musicians still want to touch and feel the product they buy. They want to know the person standing behind the product and know where to go with service issues or a return. They are willing to pay for the extra service.

There has been a significant segment of the business in used equipment. This is a market niche that can be developed by an experienced independent operator.

The last five years have been especially tough for music stores. Annual growth has been negative. Part of the problem has been the recession but a decline in young buyers has also been a problem. As the economy improves business should get better.

How to Close a Music Store- Video

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Dear Retailers,

This week I decided not to write a traditional blog post. We have a new DVD with videos showing Retail Store Closing Sales In Progress and I want to make sure you get yours before we run out.

You may have seen or read about the crowds of customers and giant sales obtained from a G.A. Wright Store Closing Sale. But, like many people, you probably thought you could never do that kind of business in your store, with your inventory.

Lines of Customers at Recent G.A .Wright Sale for Hallmark

Lines of Customers at Recent G.A .Wright Sale for Hallmark

 

 

Now, on my FREE DVD you can see for yourself that before we came in, these were ordinary stores. And, the techniques that produced truly amazing sales, selling the entire inventory and all other assets of these stores, can do the same for you!

 

This DVD is proof positive that a G.A. Wright Store Closing Sale can sell all of the inventory and other assets of a store fast, safely, and for more money than can be obtained in any other way. Even more than selling the store as a profitable business.

See for yourself…

  • How my Store Closing Sale produces crowds of eager customers waiting for a store to open. They’re ready to buy anything that’s not nailed down.
  • How we harness crowd psychology to create a super-charged buying frenzy. You’ll see merchandise practically fly off the shelf into the hands of eager customers often producing more than a month’s normal volume in a single day.
  • How every last piece of merchandise can be sold until a store is sold out to the bare walls.
  • Why these techniques resulted in more sales and more cash in the pockets of owners than they could have obtained in any other way to include selling their stores as going businesses.

Meet my clients in their stores with sales in progress and see…

  • What they have to say about the results achieved in their stores.
  • How their stores looked before, during, and after their Store Closing Sales.
  • What their customers and employees thought about the sale.

Then go behind the scenes and see how the magic is done…

  • See what’s in the 10 step marketing plan used to design the Store Closing Sale.
  • The scientific methods we use to pinpoint the customers who will buy everything in your store.
  • Our copyrighted programs and materials that build a sense of urgency so customers buy now…no waiting or checking prices elsewhere.
  • Review the 11 tasks that should be accomplished before a sale can begin.
  • Uncover the secrets that pay huge dividends and make sure you sell out to the last piece.

You get all the details in the portfolio of information I’ll send with the DVD…

  • The best way to sell a store.
  • Why advance planning is so important.
  • How to obtain the highest cash return.
  • The support capabilities you’ll need.

You’ll get case histories showing how these methods worked for other retailers. I’ll send written information about the actual results of sales so you can see what returns are possible from starting inventory levels. And, I’ll send letters with all the details from satisfied clients. I want to make sure you completely understand the store closing process so you can make a good decision about what to do with your store now or at some time in the future. If I have your email address I’ll start sending the latest videos of sales in progress by email link.

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NEW video showing how to liquidate an art supply store! You can sell the inventory and other assets of your retail store quickly, safely and for more than can be obtained any other way using the techniques provided by G.A. Wright.

See a Store Closing Sale at Green’s Art Supply. The owner, Matt Cooke, talks about the results he achieved using G.A. Wright to help conduct a professional Going Out of Business Sale. Plus hear about the skills he learned from the process that he will take with him to continue business in another location.

To determine if a Professional Sale makes sense for your retail store, it’s generally helpful to receive more detailed information about G.A. Wright that can be sent via mail or email and will include Case Histories, Letters of Reference from past clients and an explanation of how we work with Retail Businesses.

Full Packet of Information

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We’ve closed many books stores in recent years and I’m afraid we’ll close more. Although demographics and technology are working against bookstores there are ways to survive and prosper in this business. It takes thinking out of the box and an innovative approach to book retailing. Many well known names in book retailing are gone. Borders is a good example. Even Barnes and Noble is closing stores. The Future of the Bookstore is uncertain when you consider today’s current technology driven culture. Having a specific plan and a stand-out approach to retailing may help small book retailers thrive. It’s all about strategy.

I know many older adults who will never buy a Kindle. They want to hold a book in their hands. Unfortunately the younger generation has grown up with computers, iPhones, and tablets. They can’t see carrying a backpack full of books to school when they can slip an e-reader into their cargo pants.

The author, Paco Underhill, wrote a wonderful book, Why We Buy? The Science of Shopping.  It demonstrates the power of a bricks and mortar retail store. It discusses why readers want to pick up a book, feel the cover, read the forward and leaf through some pages before buying. Stores can provide an exciting experience to shoppers and expose them to hundreds of images, advertising messages and books they would never discover online while they browse the isles. You can’t do this online.

Bricks and mortar retailing is, or can be, a five sensory experience. It is the most powerful selling environment for that reason. The best retailers will engineer their selling space to appeal to the customer using all five senses.

The longer customers are in a store the more likely they will buy. A successful strategy for bookstores is to create innovative ways to keep customers in the store. Examples are cafes, soft chairs, special events, book signings, lectures, etc. The more reasons you give a customer to stay in the store the more likely they’ll make a purchase.

Book retailers need to follow the market. Older consumers are moving into the city. City bookstores will outperform rural book stores.

Many book stores are making more profit from other items they sell than from books. That may be tee shirts, coffee cups, gifts, or greeting cards.

Used books and rare books many be an area of opportunity for a niche bookstore.

Every retailer needs a competitive advantage to survive. We still have too many retailers in this country and the number of stores is contracting. Unless you can find and define a powerful competitive advantage it’s probably time to get out of this business.

This video shows a sale we did for a Bookstore. After many years in retailing the owners decided it was time to close their business.

Store Closing Information Packet

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Nearly all retail business owners know that Black Friday has become an unofficial National Holiday. Now is the time for Retailers to Start Planning your Black Friday Sale!

One of the principal keys to running a successful retail store any time of year, is knowing when to run an in-store promotion, when to offer a discount and when to host a customer appreciation event. The majority of retailers succeed at moving their overlooked and dated inventory during a huge selling day like Black Friday, but to their surprise, struggle to increase profits. Is this because they are getting just as overly excited about Black Friday as their consumers? Perhaps retailers are falling prey to the spirit of giving too much too early?

Many employers are now enthusiastically giving their employees that day off so they will go out and shop to stimulate the economy. The so-called ‘Black Friday Fanatics’ request time off work months in advance and are in line by midnight on Thursday. Recent studies find that people aren’t even out buying for Holiday gifts, they are out buying for themselves, cashing in on every discount they can. In 2012 & 2013 many stores opened on Thursday night (Thanksgiving) starting at mid-night. This year it has been rumored major retailers such as Kohls and Macys will be open at 4a.m on Thanksgiving Day, offering their employees Holiday pay or time and 1/2 so consumers can spend the entire holiday shopping.

You can always bet your local news anchors will be covering a story of someone getting trampled while pushing to get into a store to grab as many items as possible. Or two people fighting over the last Monster High Doll for $11.99 or Blu-ray player for $39.99. With the Government Shutdown in 2013 and higher health care premiums in 2014 and the Federal Reserve extending low interest rates on home purchases, consumers will be out in full force looking for a bargain. I predict 2014 Black Friday will be the largest attended by shoppers of all income levels since the 2008 recession. But this year people get more time to grab those deals so hopefully the idea of having retailers open for business on Thanksgiving will cut down on the stampedes and personal injury.

The question that many retailers ask is, what is it about Black Friday that makes people go out and shop till they drop…even though they know that the discounts and Holiday sales will last until well into December or even January? Why is this weekend so special? Many business owners still argue that it’s not a ‘make or break’ day for retailers, in fact most retailers won’t come out of the red and into the black that day at all. So why have a sale? The answer is simple. It’s a time when people are out shopping for an experience, customer traffic is up, spending is up and if you aren’t part of the experience, your consumers will fade quickly into the cloud of digital shoppers and won’t remember you when they venture out to embrace the shopping experience.

How to make your store stand out:

  • Work with your vendors early to provide outstanding pricing for some of your ‘most wanted’ items, what your customers come to you for. This is not the time to offer up ‘unwanted’ merchandise at ‘cheap’ prices.
  • Send a personalized letter, email or flyer to all or select customers to have in their hand the Monday before is key.
  • Clean up and change up how your store looks! ‘Specials’ don’t need to be at the front door, but they do need to be presented in a place and manner that is easily accessible.
  • Partner with a local Hotel/Motel and offer ½ off room certificate with purchase.
  • Partner with a restaurant and hand out coupons to your customers in exchange for the restaurant handing out flyers promoting your sale weeks in advance.
  • Give a coupon with a purchase that day for ½ off on another shopping day during the season.
  • Offer energy drinks /bars or hot chocolate free of charge for people out early or waiting in line before you open your doors.
  • Free gift wrapping (A small thing many retailers have stopped doing- this can be huge for people looking for quality service and nostalgia)
  • Hire G.A.Wright to conduct a Holiday Sale for your store to liquidate old inventory and sell it for cash. Fill out form below for FREE brochure.

If you are not already implementing a marketing plan for your Retail Business this holiday season, get one now by calling our office at 303-333-4453 to speak with a Senior Retail Consultant.

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Furniture and home furnishing stores are doing well with good margins and turnover rates but are slowly trending down.

There have been many positive Economic Trends for Furniture Stores. New and existing home sales have been rising, incomes are rising from a recession low, household debt is down, credit is available and interest rates remain low. Consumers feel wealthy because housing prices are rising and the stock market is rising. Birth rates hit a low point in about 1976 and rose steadily until 1991 when a small dip began. The people born during this 15 year period are forming new households now. Household formation historically begins at an average age of 25. This group was delayed by a series of economic crises beginning with the dot com bust in 2001 followed by the great recession in 2008 and still lingering. There is a great deal of pent up demand that is being satisfied as this Millennial Generation gets jobs and forms households. All of this has been good for the furniture business.

Of course, younger adults forming households for the first time need everything at once. They tend to shop at the large category dominant retailers where they can find it all at the lowest possible price. The big furniture retailers are doing very well. However, new home purchases are slowing because of rising mortgage rates and rising home prices. Retailers should not expect the increases seen since 2011 to continue. The furniture business will plateau but should remain healthy for the next few years.

The high end of the furniture business has been fueled by older people moving out of the big house in the suburbs where they raised a family and moving into a smaller but more expensive house in or near the city. They wanted some new pieces of furniture but were also interested in the designer coming out to be sure the upholstery matched the drapes and to help pick paint colors. They shopped for better quality furniture and wanted lots of service. This trend is currently peaking. As these people retire and move to fixed incomes their purchases will decline. Expect this decline to continue until about 2026 when the Millennial Generation starts to move out of the suburbs and into the city. A combination of retiring Baby Boomers and the following Baby Bust, Generation X, will cause this decline in high end furniture sales.

Please watch a video from a recent client where we conducted a Promotional Sale and the results he achieved:

Full Packet of Information

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G.A. Wright is the leader in conducting Total Liquidation Sales for retailers in all sectors of the industry. Recently, G.A. Wright conducted a Going Out of Business Sale for a shoe store located in Edmonton Alberta Canada. The owner Todd Mansell tells us in this video how he searched for a Liquidation Company for Shoe Stores in his area and found nothing until he received a letter from G.A. Wright. After receiving references from other retailers who hired G.A. Wright and talking to a sales representative, Todd made the decision to close his business.

This video shows Todd Mansell the owner of Corona Shoe Re-Nu talking about his sale and the results he achieved by hiring G.A. Wright to conduct the blow-out event. Hear how customers reacted to the store closing process as well as employees and why doing a liquidation sale this way was a great decision for Todd and his business.

“Not only did we sell merchandise, but we had store fixtures, furniture, equipment, and lots of odds and ends, and it too was moving out almost as quickly as the shoes. Stuff I thought I would just throw out, ended up making me money! … As I write this, I’m sitting looking at my empty store. I can emphatically say that I could have never done this on my own. In fact, I shudder at the thought. The closing of a business can be a sad occasion, and it is, but we went out the best way imaginable, with a resounding bang. I know many retailers and if they ever mentioned to me about closing, opening a new location, or just reducing stock I would go out of my way to make SURE they call G.A. Wright. It’s an extraordinary business model that I have personally witnessed, and it truly yields results.” G.A. Wright Client Todd Mansell

Store Closing Information Packet

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