When you hear the name “Hudson’s” and “liquidation sale” in the same sentence in Mississippi, you immediately think of Hudson’s Salvage and Hudson’s Dirt Cheap. But there is another Hudson’s in the state making big waves in the bankruptcy liquidation sale business.
Hudson Capital Partners, LLC, (www.hudsoncpl.com) was started four years ago by a team of experienced asset disposition specialists including Fulton Stokes, chief operation officer, A.R. Williams, chief financial officer, and Jim Schaye. A friend of Stokes’, former U.S. Rep. Ronnie Shows, recommended that the businessmen contact someone who might be interested in being a partner in the company, Mickey Hudson with Hudson’s Salvage (now Hudson’s Inc.), one of the state’s most successful retailers in business since 1938.
“When we all got together and started the company, we decided to use the Hudson name because that means something in marketplace with what they do,” Stokes said. “After two-and-a-half years, we were doing a lot of deals, and we attracted a $10-billion investment group that saw what was going to happen in retail liquidations over the next few years. This large firm wanted to invest in our company, so we reorganized the company with them as the majority owner. Mickey Hudson and his family are still stockholders, but aren’t actively involved in managing the company. We are two separate companies and always have been.”
Stokes said Hudson Capital is uniquely positioned to apply its long-standing expertise to providing solutions to the pressing problems that retailers face today, including management of excess, obsolete and discontinued inventory, changing geographic and demographic circumstances, unproductive store sites and real estate and liquidity issues. All principals of Hudson Capital are career retailers and experienced asset disposition specialists.
Stokes said they founded the company because they saw there would be a significant amount of retail closings and liquidations coming in the marketplace. Most of the companies handling liquidation sales for major retailers are located in the Northeast or on the West Coast. They felt there was room for a Southern company in the marketplace, and that Mississippi was ideal because of its lower cost of doing business.
Over the past four years, the company has sold $1.5 billion worth of merchandise for various clients including Mervyn’s department stores, Sak’s Fifth Avenue, Storehouse Furniture, Tower Records, West Point Home and a number of others. The company has done well enough now to open a second office in Boston.
“We are kind of a quiet company in Mississippi,” Stokes said. “A lot of people don’t know that much about us, but we have done a lot of deals. Right now, we are involved in the liquidation of Friedman’s Jewelers, which is a $350-million retail inventory deal with 377 stores nationwide. We are joint venture partners with two other companies on this deal, Great American Group and Silverman Jewelers.”
Friedman’s went into bankruptcy after operating for 88 years.
Hudson Capital was mentioned on “The Today Show” recently. Stokes thinks that is pretty good for a company only four years old (its anniversary was May 16), especially considering most of its competitors have been in business 20 to 70 years.
Liquidation services in demand
“The U.S. has too much square footage in retail stores,” said Stokes, who was a previous CEO of Bill’s Dollar Stores. “It is very competitive. The price of gas is hurting a lot of fixed-income people. They are not spending as much in the stores. So, many retail companies are in trouble. Retail is like a tree. It keeps growing new limbs, and after so many years, you have to prune it to get rid of weak companies or stores to take off again.”
Liquidation sales usually attract shoppers by the droves. Customers get excited by the lower prices. As discounts move up, buyer activity increases.
Hudson Capital Partners does more than just handle the sales. It also deals with getting clients out of leases, selling all the fixtures and leaving the stores broom clean so the landlord has it ready for the next tenant.
Spending in state
Being located in Mississippi is a plus for the state’s economy. For example, Hudson Capital Partners uses GodwinGroup to handle advertising for the sales. Since starting, the company has done $2.8 million worth of business with Godwin.
“A lot of our competitors have in-house advertising departments, but we consciously decided to support the local economy as much as we can,” Stokes said. “Why send advertising to Boston or Chicago when you have a firm here that can do it and keep the money in the local economy?”
While the Friedman’s deal is huge, the company expects even greater things in the future.
“We are bidding on a lot of big deals right now for high-profile jobs,” Stokes said. “The next two years are going to be something else in the liquidation business.”
CFO A.R. Williams said the company is poised to do well in the current liquidation market.
“We are smaller, more nimble and therefore have less overhead,” Williams said. “As a result, we can bid more aggressively than some of our larger competitors. Part of the cost structure is that our overhead being located in Mississippi is lower than in New York or Boston.”
Hudson Capital performs liquidations on a fee-for-services basis as well as guarantees of net recovery at auctions where Hudson is at risk of loss if actual sales are not sufficient to cover the guarantee.
Hudson Capital Partners works with approximately 100 contract consultants located across the country who come in and manage these stores when a sales start.
“The liquidations are controlled centrally by us, but the consultants carry out the sales and execution at the store level,” Williams said. “They take care of inventory, make sure employees are handled as the former company would handle them and see that the money gets to the bank.”
Contact MBJ contributing writer Becky Gillette at email@example.com.