Oh, the dangers of doing business with Wal-Mart! The folks at ADDvantage Media have watched a dream turn into a — lawsuit. In 1993 and 1994, ADDvantage entered into contracts with Wal-Mart to install its Shopper’s Calculators in certain Wal-Mart stores. According to ADDvantage, those contracts were never implemented, and so the company sued Wal-Mart for breach of contract. They settled in September of 1995 on a new contract to install shoppers calculators in all Wal-Mart supercenters. This was tantamount to hitting the Lottery for this small company. The Wal-Mart contract was worth $23.5 million to ADDvantage. As of the end of March, 1998, the shopping calculators, which are solar powered and fit on the shopping basket handles and display advertising, had been installed in 336 Wal-Mart supercenters. In August of 1997, ADDvantage submitted a proposal for a new contract with Wal-Mart once the $23.5 million figure was reached. In May of 1998, Wal-Mart reportedly told ADDvantage that it would not enter into a new agreement or extend the old one. On September 2, 1998, ADDvantage announced that it had filed a civil complaint against Wal-Mart seeking compensatory and punitive damages, alleging that Wal-Mart CEO David Glass breached contracts with ADDvantage, and that Wal-Mart is liable for misrepresentation, deceptive trade practices, injurious falsehood, and intentional interference with contractual relationships and business expectancies. The charges add up.The lawsuit says that ADDvantage has suffered substantial financial damages as a result of Wal-Mart’s dropping their contract. The President of ADDvantage said that his calculator “was a huge success for Wal-Mart”, and that he was “shocked and disappointed” when Wal-Mart said it was discontinuing the calculator project. ADDvantage told its shareholders that Wal-Mart’s decision “remains wholly unexplained and unexpected. Furthermore, it’s a decision we find especially difficult to understand in view of our proven ability to increase Wal-Mart’s advertised product movement…and the very enthusiastic support voiced in behalf of the program by Wal-Mart’s management, their store managers and their customers.” Bottom line here: all that “enthusiastic support” from Wal-Mart didn’t add up to much of anything.
If you find yourself commiserating with the folks at ADDvantage, you can write to Charles Hood, President, AMG, Meridian Tower, 5100 East Skelly Drive, Suite 1080, Tulsa, OK 74135. Or maybe you’d like to suggest that you don’t need a calculator to figure out that it’s not wise to put all of your eggs in Wal-Mart’s shopping basket. Both sides will need a calculator to add up the legal fees the latest lawsuit will generate.
