OT - Store loses $7M with Seahawks' win
In the days leading up to the Super Bowl, Gallery Furniture flipped a coin to determine that the customers would be rooting for the Seahawks while the store would be rooting for the Broncos.
Anyone who spent more than $6,000 and had their furniture delivered by kickoff Sunday would get a full refund if Seattle won. Roughly 1,000 people bought enough to be eligible for the promotion with an average bill of $7,000, and McIngvale said one customer will get $30,000 back as a result of his big purchase.
http://espn.go.com/nfl/playoffs/2013/story/_/id/10396430/super-bowl-fur…
February 3rd, 2014 at 9:16 PM ^
February 3rd, 2014 at 9:23 PM ^
Otherwise known as "time of year when lots of people lose money for no reason at all."
February 4th, 2014 at 12:19 AM ^
What if he hedged the bet with his personal money?
February 3rd, 2014 at 9:21 PM ^
February 3rd, 2014 at 9:24 PM ^
February 3rd, 2014 at 9:25 PM ^
I wonder if this is like the contests where if you make a hole-in-one you win a car? The golf course or the charity funding the outing usually takes out an insurance policy to cover a loss. Either way I'm sure this guy wasn't happy about halftime.
February 3rd, 2014 at 9:36 PM ^
February 4th, 2014 at 1:38 PM ^
company would insure a 50/50 bet on a potential loss of $7mm or anything near that? If one did, the premium would be astronomical. Incurance companies are like Vegas, they play the percentages which are in their favor.
February 4th, 2014 at 10:57 AM ^
I don't know whether this guy had insurance -- another poster says he didn't. However, I know of businesses that do these sort of promotions that do get the insurance to manage the risk. The increased sales of large items (e.g. furniture) brought on by the excitment of the promotion and the game can cover the premiums.
In other words, these sort of things can actually make sense, if managed right.
February 3rd, 2014 at 9:26 PM ^
Sometimes stupidity is a bad idea.
February 3rd, 2014 at 9:30 PM ^
If he was smart he would of put another 7 million on seahawks to win.
February 3rd, 2014 at 9:35 PM ^
You sir have figured it out. Middle the game and he gets a shit-ton of free advertising for the cost of the vig.
February 3rd, 2014 at 9:43 PM ^
If he does nothing and Seattle wins, he is out just the $3.5M (but no vig).
February 4th, 2014 at 7:00 AM ^
He doesn't beat the expense of $7M in inventory if he sells his inventory.. People paid upfront and got the refund when Seattle won. If Seattle lost, he would have lost $7M in inventory... for $7M in sales.
February 3rd, 2014 at 9:35 PM ^
February 3rd, 2014 at 9:33 PM ^
Did they not insure this offer?
I remember Jordan's Furniture has done this type of thing for if the Red Sox win/won the World Series. I'm pretty sure they insure the "bet." I'm not 100% sure, but you'd be stupid not to hedge it regardless of the chances.
February 3rd, 2014 at 9:38 PM ^
In the article is says he didn't go for insurance, and it was a hit equivalent to five percent of revenue. Fun fact: get Wal-Mart to do the same and they're giving away ~$5.75b
February 3rd, 2014 at 9:38 PM ^
Nope. He says the gambler in him prevented him from getting insurance.
February 3rd, 2014 at 10:28 PM ^
The gambler in him is an idiot. I'd have him surgically removed.
February 3rd, 2014 at 9:37 PM ^
Have shopped at his chain of stores. They do this every year, heck they did it twice a year for the SB and the national title game.
I think what they do is pull off all the special sales they usually run and then you are paying full price for everything. Markups and everything what they are.
He had a 400,000 steer on display in his store when I was there, he's probably doing ok.
February 3rd, 2014 at 9:47 PM ^
I have zero sympathy for them
February 3rd, 2014 at 10:08 PM ^
February 3rd, 2014 at 10:16 PM ^
February 3rd, 2014 at 10:49 PM ^
He claims he would have bet on the Seahawks had he bet.
February 4th, 2014 at 12:51 AM ^
February 4th, 2014 at 9:56 AM ^
February 4th, 2014 at 12:28 PM ^
My bride works at a furniture store, serious markup
February 4th, 2014 at 12:31 PM ^
I know people use the euphemism, "bet the farm on it" all the time, but nobody actually is supposed to go out and DO IT!