Rockton, Illinois-based Blackhawk Hobby Distributors and Knoxville, Tennessee-based Gameboard Distributors have reached an agreement for Blackhawk to begin servicing Gameboard's wholesale accounts. Gameboard was probably the third or fourth largest game distributor; it will be shutting down. 

As part of the agreement, Blackhawk will honor all preorders and backorders originally placed with Gameboard by retailers, at the same prices and credit terms.  Similarly, beginning Monday Blackhawk will honor all orders placed with manufacturers by Gameboard.  Blackhawk has not acquired the inventory, receivables, or liabilities of Gameboard. 

We asked Blackhawk owner/CEO Kim Kowalewski how the deal got started.  'It was either early last week or the prior Friday, [Gameboard owner] Frank [Uchmanowicz] called and told me he was thinking of going out of business and was curious if we were interested in buying his accounts,' Kowalewski said.  'I told him I wanted to sleep on it overnight, and did.  I also wanted to take a little bit of time to make sure we were ready to do everything; and after talking with the key people here, and making a couple of calls for financing, we put the deal together.  So it went real fast.  The biggest hang-up was probably waiting for my lawyer to draw up an agreement, but we came to the agreement pretty easily.'

Kowalewski described the basics of the agreement.  'What it involves is that we're assuming responsibility for servicing Gameboard's customers; he's giving us his account list; he's also giving us all the preorders and backorders from his customers that he has in his system; and then we're going to assume responsibility for purchase orders that he has placed but not been filled as of next Monday, so that anything that hasn't been released yet in the way of preorders (or backorders for that matter) with vendors, we'll go ahead and honor those and pay those according to terms.

According to Kowalewski, Gamebaord was 1-1/2 times the size of Blackhawk; Blackhawk will grow to 2-1/2 times its current size.  We asked Kowalewski what the deal meant for his company..  'It means that all the infrastructure we put in place will finally pay for itself,' he laughed.  'We've been ready for this.  We have a state of the art computer system:  we're very competent at tracking backorders, preorders;we give customers an awful lot of information.  The system we've had has really been overkill for the number of accounts, the number of users that we've had.  Since I acquired Blackhawk I've tried to build the company to where it would be profitable at low volume or high volume, and we're just going to be changing our volume.  And I think we've been ready for it for quite some time.'

The accounts will be serviced from Blackhawk's northern Illinois warehouse.  We asked Kowalewski if his warehouse operation would be able to handle the rapidly increased volume.  'Yes,' he said. 'We're adding a lot of storage space this weekend to our warehouse, and we're just going to revamp our entire shipping area over the weekend, and I think we'll be more than ready as of Monday morning to handle whatever comes in.' 

With numerous exceptions, most of Gameboard's accounts were located south of its Knoxville location, but Kowalewski also downplayed the impact of the additional discont on delivery times.  'I don't think [distance] will be an issue,' he said.  'They had a two day air program rolling, and we intend to honor that for now and assess how far people are from us and see what kinds of options we have as we go forward.  Our main concern right now is just having a real smooth transition.'

Blackhawk is hiring two Gameboard salespeople, John DeVore and John Shepherd, to handle the same accounts they did at Gameboard.  DeVore will continue to work from his home, as he did for Gameboard, and before that, for Liberty.  Shepherd is going to spend some time at Blackhawk headquarters before deciding whether to relocate or to continue to work for Blackhawk from Tennessee.  Blackhawk reps will handle some other Gameboard accounts.

Blackhawk brings Wizards of the Coast and Games Workshop as part of its package for former Gameboard accounts.  Gameboard bought WotC product from a secondary source, and did not carry Games Workshop. 

The deal did not include any of Gameboard's fulfillment business, such as its handling of Fanpro's Battletech releases.

Gameboard will continue to operate its retail stores, which will be serviced by Blackhawk.

We asked Kowalewski why he thought Gameboard had approached him.  'I'm sure a lot of it has to do with our size, and the fact that we're also in the Midwest (that we can probably reach his accounts and service them well),' he said.  'Frank also said that he thought we had a good reputation.  I think he also picked up on the fact that we were looking to grow.'