Alternative strategies in retailer & consumer product company loan defaults

Article Abstract:

Lending institutions faced with defaulting retailers or distributors of consumer goods usually prefer a bulk liquidation of their debtors' inventory and other physical assets. However, this approach does not fully recover the actual worth of the inventory, leaving the creditors with a significant loss. In this light, alternatives should be considered. One option is to hold promotional events to make the liquidation sale more successful. Old merchandise can be made attractive by surrounding them with newer merchandise, thereby attracting more customers. Consumers can be made aware of the sale through advertisements in radio, television, newspaper, direct mail and other tools. However, creditors need not have to go through these measures if they are proactive. By having foresight, they can avoid a default by detecting problems on a timely basis, thereby protecting their investment.

Management, Consumer goods industry, Commercial loans, Default (Finance)

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Creating a modern credit approval environment

Article Abstract:

Retailer Dayton Hudson has installed American Management System Inc's on-line Automated Credit Application Processing System (ACAPS) in 37 stores in seven states. The system increases productivity in areas of credit authorization, bill adjustments, and new accounts. It utilizes two credit scoring models for quick and accurate assessment of applicants' creditworthiness, and for setting appropriate credit limits. ACAPS makes possible improved control of operations and enforcement of overall credit policy throughout the store network, and its reports help managers analyze data more effectively and make better decisions. An example illustrating how Dayton Hudson's staff uses ACAPS to process instant credit applications by telephone is presented.

Services, Technology application, Target Corp., Credit management, DH, American Management Systems Inc.

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