Game distributor Zocchi Distribution is closing its doors 'in the next few weeks,' according to General Manager Jim O'Neal. In preparation for the shut-down, the company is running a 75% off sale to retailers on its inventory. O'Neal cautioned that the company is running with a 'skeleton crew' so its normal same day shipping commitment will probably not be met in all cases, but product will be shipped within a reasonable time. O'Neal said that the best of the remaining inventory being sold at deep discounts included products from 'main secondary lines' such as White Wolf, Steve Jackson, Palladium, and Games Workshop. While O'Neal said that there are still some things in the work that could prevent a shutdown, in all likelihood the company will close for good after selling down its inventory.
The outcome for creditors is uncertain. O'Neal said that owner Mike Hurdle had been in discussions with attorneys and with the company's bank to determine the best path to take; bankruptcy is one possibility being considered.
There were a number of factors that led to Zocchi's cash problems, according to O'Neal. The trouble started when Zocchi's license to distribute Wizards of the Coast product was not renewed for 2001, leading to a loss of product volume and a steady attrition in customers over time. Macro-economic factors were also an issue, especially after September 11th, when orders dropped off and payments from retailers slowed. Some recent product-specific factors also caused problems for Zocchi, including lower-than-expected sales on WizKids' Lancers Expansion. The d20 explosion also affected sales. Initially d20 products were selling well but diverting sales from other RPG products; more recently, sales on d20 products themselves dropped precipitously, to a level in October less than half what they were in June or July. According to O'Neal, the effects of the September 11th attacks on the U.S. were what pushed Zocchi over the edge. 'If you'd asked me at GenCon whether we'd be here at Christmas, I'd have said we would be,' he said, 'but September 11th was the final nail in the coffin.'
Asked whether distributor consolidation was a factor, O'Neal said it was minor because Zocchi's strategy had always been to be a smaller alternative to larger distributors. He said that owner Mike Hurdle's goal was to be a strong #2, not to be the largest company in the business, and that being a smaller company was actually an asset for many of its customers.
The employees will probably scatter. Salesperson Bill Jaffe has been hired by ACD distribution and plans to relocate to Madison, Wisconsin and begin working there soon. Others plan to apply at Diamond's new distribution facility in Memphis (see 'Diamond Moving to Memphis'). At least one has indicated that he's had enough of games and has taken a job in an unrelated industry. O'Neal said that he and a number of others were interested in staying in the industry and were looking for opportunities.
Current owner Mike Hurdle bought Zocchi Distribution from founder Lou Zocchi at the end of 1996 and opened it in its current location in Holly Springs, Mississippi in February of 1997.