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Alliance Halts Payments to Vendors; Asmodee to Leave Alliance in July 2020

W. Eric Martin
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Geppi Family Enterprises, owner of Alliance Game Distributors, the largest wholesale hobby games distributor in the U.S., notified its vendors on March 31, 2020 that it will not pay those vendors as previously scheduled. Here's the text of the letter sent to those vendors:
Quote:
As the world responds to the outbreak of COVID-19, our focus is on protecting employees, understanding the risks to our business, evaluating the risks to our industry and examining the Federal Government resources available. While the full impact of this epidemic is still unknown, one thing is certain: supply chain disruptions have cash flow implications across the extended industry that can’t be underestimated.

While we work to understand the current industry landscape, the unfortunate truth is that we are no longer receiving consistent payments from our customers. This requires that at this time, we hold payments to vendors previously scheduled to release this week. This is a difficult decision and not one we make lightly. As this situation continues to evolve, we are committed to building out a plan for payment and will have more information to share later this week.

Thank you for your patience and understanding during these difficult times.
Geppi Family Enterprises also owns Diamond Comic Distributors, Inc., and Diamond is similarly halting previously scheduled payments to vendors. Naturally this is an unwelcome surprise to those vendors, such as publisher Twogether Studios, which posted this in response:

Board Game Publisher: Asmodee
In other Alliance-related news, on March 10, 2020, Asmodee North America announced that its exclusive distribution agreement with Alliance would end on June 30, 2020, and as of July 1, 2020 "Asmodee USA Distribution will begin selling direct to all retail channels". Here's an excerpt from that announcement:
Quote:
As Asmodee USA transitions to a full-service distributor for all channels, retailers can expect an expanded Sales team capable of supporting retailers with best-in-class service.

Asmodee USA recognizes the benefit of choice and that many retailers work with multiple distribution partners. Once sales are open to all channels on July 1, 2020, ACD Distribution will act as Asmodee USA's new distribution partner. Retailers will be able to order games and supplies from ACD. Asmodee USA's industry-leading trade programs, including the Best Sellers Program, AsmoPlay, AsmoDemo, and more, will only be available directly through Asmodee USA.

"Selling directly to all channels is an exciting new step for Asmodee USA. We've been building towards this goal, implementing systems and teams that will help us achieve the high standards we hold ourselves to when it comes to servicing our retailers," said Andre Kieren, Asmodee USA's Head of United States Distribution. "Our knowledgeable and enthusiastic Sales team will be ready to service our customers as we strive to offer them best games, trade programs, and services. We are also thrilled to have ACD with us as part of this step. ACD has years of distribution experience and dedication to customer service that will offer retailers an additional option when purchasing our games."
This move was not unexpected. In my June 2017 post about ANA going exclusive with Alliance I wrote:
Quote:
So what now? The four non-Alliance distributors will lose some percentage of their business, and whether they survive or not will depend on what that percentage is and what they do in response to this loss of revenue. Hobby retailers who previously dealt with a non-Alliance distributor for titles that originate or are distributed by Asmodee North America must now deal with Alliance — unless they purchase directly from ANA, of course, which might be where this path leads to in the end. After all, ANA has gone from a dozen distributors to five to one in a couple of years. Why stop there?
In late March 2020, Asmodee NA announced that it won't release new titles through April 2020, a move that coincided with Alliance closing its warehouses and halting shipments. With Asmodee taking charge of its own distribution in July 2020, I can imagine ANA putting the brakes on new game releases throughout all of Q2 2020, then (assuming retail stores are open again) unleashing a flood of new titles all at once in July. After all, why ship product to Alliance in May when its rights for distribution end on June 30? I'm speculating about this course of action, but given the current global situation, I can imagine Asmodee (and many other publishers) putting a pause on everything until the market seems like it's returning to normal — whatever that might be.
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