Surprised no one has commented on this yet. Wal-Mart is one of CSS' biggest customers and recently announced that it would begin implementing significant price reductions on "thousands of items." For those that are either unaware or haven't been following a lot of posts on this board, Wal-Mart is one of CSS' two biggest customers. This doesn't bode well for CSS because if WMT is slashing its prices, it will look to maintain its margins by most likely paying lower prices for the products it purchases. Hmmmm.... this could have potentially significant negative consequences on CSS' business and margins. Sales to Wal-Mart by CSS have probably already occured so margin deterioration on new pricing by WMT probably won't have a big effect on this season's sales, except to the extent that WMT anticipated a difficult year and drove price cuts last year when negotiating its CSS products for this season (and remember last year was a very painful time so this could be highly probable). CSS's product is for the most part a commodity item and highly discretionary, especially in the difficult economic times we are in today. I believe that in addition to pricing consessions to WMT and Target, these two customers can also return product back to CSS. I wonder how big of an impact this might have on this season's ultimate revenue when customers don't splurge on gift wrap and use whatever they have left over from last year.

food for thought...


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Walmart Announces Hundreds of Millions of Dollars in Price Reductions
Unprecedented savings each week this Holiday season

Press Release
Source: Walmart
On 2:43 pm EDT, Wednesday October 21, 2009

BENTONVILLE, Ark., Oct. 21 /PRNewswire-FirstCall/ -- With a commitment to save American shoppers more than ever this holiday season, Walmart (NYSE: WMT - News) announced it will offer weekly deep savings events and new everyday low prices on thousands of items across the store, starting today through the holiday period. Each week, Walmart will announce new pricing reductions, beginning with select items in groceries and entertainment.

"Many of these prices represent the lowest we've offered in years, because we know these are tough times for American families," said Eduardo Castro-Wright, vice chairman, Wal-Mart Stores, Inc. "We made a purposeful decision to focus initially on everyday staples as well as items that often require larger spending commitments in preparation for Thanksgiving and Christmas."

rest of story continued at below link.

http://finance.yahoo.com/news/Walmart-An...