IPCPR has been fruitful and productive for everyone present! Its a whirling mass of humanity hustling and bustling to make deals and connections. Business is definitely booming and many companies are making a killing on the showroom floor. One such story is the burgeoning AJ Fernandez empire and their San Lotano lines. San Lotano has been flying off the shelves of many retailers and has even garnered quite a few accolades from online publications, including us. It is really no surprise that they are doing well and thinking about how to streamline their growing operations. In that spirit they have decided to have reps in-house instead of going through the independents. This is not an unusual move, but the way San Lotano chose to execute it at the show has just cost them a large part of their southwest, and potentially their national market.
We tend to cover major news stories both national and international, but as we are Arizonans, we have decided to focus on the regional damage that just happened on the showroom floor. San Lotano has been sold rapidly due to the efforts of local independent reps promoting the brand. In fact, I would not have become as familiar as I am with the lines if it were not for the efforts of my local rep to keep me informed of upcoming products.
The story and the fallout with Fernandez was over how the reps were informed. Multiple independent reps brought clients to the Fernandez booth to do business with them, only to be commended for their great work and then summarily dismissed due to the company going in-house. One can imagine for the reps working the show how aggravating it was to court customers and promote a product, only to have their business pulled away from them and be humiliated by being publicly dismissed by the company they had just worked so hard to promote. The further humiliation was that in at least one case when the rep was publicly dismissed, the folks from San Lotano went on to ask the rep’s customer if they knew anyone locally who wanted to work for them in- house. So not only was the rep dismissed, but he then bore witness to his client being asked by the manufacturer if they knew of anybody in their area that would be interested in representing Lotano’s in-house team.
This maneuver was not only pulled on one independent representative, but many according to several corroborating sources. San Lotano was having a great year, and I’m sure in the scheme of things they will continue to have a great year, but at the end of the day San Lotano’s bottom line was just hit hard by the amount of business lost over the issue. In Arizona alone at least three of the biggest San Lotano carriers that have multiple chains promptly canceled their large orders with the company. As one source pointed out, “these stores are loyal to the independent reps who work hard to find and supply them with the best product.” According to the rep who was aggrieved and the others involved, the general sentiment is that streamlining and consolidating sales to in-house is a valid move, but perhaps a phone call would have achieved the same result. It’s the manner in which this action was executed that has the retailers and independent reps upset.
Decorum is important, especially in the affairs of business. At the end of the show the sad fact is that AJ Fernandez will walk away with a substantial loss in income due to something that could easily have been remedied by a simple phone call or private discussion behind closed doors. The other unfortunate reality is that not only is money lost on both sides, but many brand-loyal clients across the country will not be privy to one of their favorite sticks, due solely to a breach in decorum.
Editor’s Note: We followed up with AJ Fernandez’s representative at their booth today and asked him about the incidence. His response was that business was going good and that they were indeed going in house. No other comments about the matter were given.