| HBS Case Collection
Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A)
CEO Bill Nichol must somehow negotiate a surprise ultimatum from Walmart, his largest customer, about his largest and most profitable product line: “We're dropping it.” Among its hosiery products, the Kentucky Derby Hosiery Co. produces and sells a branded line of infant socks to Walmart under an expensive license from another manufacturer, subject to unconditional, multi-year sales minimums and significant forward financial obligations. Taking out long-term bank loans, his firm has purchased modern, high-speed machinery to manufacture this line. Yet his Walmart contracts run only one year at a time. Without the Walmart volume and profit on these branded infant socks, Kentucky Derby Hosiery Co. faces financial distress. In a generally bleak North American textile environment, Nichol ponders the most promising negotiating strategy and tactics to rescue this product line.
Keywords: Customer Relationship Management;
Apparel and Accessories Industry;