Ski Market Sharpens Its Image

The WSJ Bankruptcy Beat reports that the Ski Market Ltd. has retreated on its no-hold-squat gift card stance. The company, which filed for Chapter 11 bankruptcy protection last month, is having second thoughts about not honoring its gift cards. I doubt that is in any way related to the tongue lashing Ski Market caught from the Connecticut attorney general. Connecticut (apparently a popular ski haven?) and other New England skiers, however, will only be able to redeem half the value of the gift card. This scenario sounds familiar.

In 2008, when Sharper Image became part of a long list of retail failures it first proposed not to honor any gift cards.  Later, it agreed to honor them, but only if consumers spent twice the amount of the gift card in the store. Well, there’s one way to secure DIP financing: extort it from your customers. It’s also a foolproof way to alienate and agitgate customers. The blogs and chat rooms lit up with angry missives aimed at SI.

Ski Market has about $200,000 in outstanding gift cards.  The first time around, when the company decided not to honor the gift cards, it blamed the Bankruptcy Code – claiming that the Code did “not allow” the company to honor customer redemption of the cards. News flash to Ski Market: you might want to check with your bankruptcy lawyer before you make that statement. The Code allows it, provided that you seek approval from the bankruptcy court.

If the company does move for permission and the bankruptcy court does approve Ski Market’s request, New England ski bunnies will be able to use those gift cards (albeit at half value) from Jan. 16 to Jan. 24.  Of course, at the time of this blog, the company had to file such a motion.