Phil,
Walmart and Rite-Aid only placed purchase orders for Zicam within the past couple of weeks. It can take large chains one to two months from the time they place orders to distribute products to their stores. As I'm sure you know, many large chains have central distribution centers and it takes time to get products to their stores. This is especially true for new products since they have to enter them in their inventory system, assign sku numbers, create shelf layouts, etc.
Eckerd Drug Stores took nearly two months to fully distribute Zicam to their stores after their distribution center received it from GumTech. This is why most large chains place orders two to three months before they want it on the shelf. Albertsons seems to have the best inventory control from what I've seen although they were one of the first to carry Zicam and reorders are much faster than initial orders.
As Howard noted, many employees have never heard of new products until they show up at the door. I was told by GumTech management that Walmart corporate made Zicam a mandatory product at 1200 Walmart stores this cold season. These 1200 stores have larger cough and cold sections and the managers of the remaining Walmart stores can use their discretion whether to carry it. To the best of my knowledge, Rite Aid will carry Zicam in all their stores. I will call GumTech on Monday to ask if they have already started shipping to Walmart and Rite-Aid.
I have also been told that the buyers at K-Mart and Walgreens have indicated that they will stock Zicam for the upcoming cold season but I don't think they placed purchase orders yet. As Howard noted, the best people to call are the buyers for cough and cold products at each chain. Somebody posted a list of buyers for major chains on the GUMM thread at Yahoo about a month ago. If you are interested, I'll try to find it and PM it to you.
It's also possible that employees at stores that stock Zicam haven't even heard of it or don't know that it's on their shelf. I called a few local Albertsons and Eckerds stores about two months ago and the employees that answered the phone said they hadn't heard of Zicam. I asked them to go look, and when they returned to the phone, they said they had it. This is a valid concern for those who are long GUMM but I'm not worried about it yet because the company hasn't started their advertising program yet. They are timing the advertising with the cold season and after they have full distribution through retail channels. I am also confident that a major medical journal will publish the Zicam study near the beginning of the cold season. If this occurs, history indicates that Zicam will become a relatively well known name in a short period.
In the short term, publication in the NEJM (or other reputable medical journal) is the gamble for traders. If Zicam is published, I think the stock will break resistance at 15 and trade up to 18 - 20. If it isn't published, I think it will test support near 9 1/2. Based on my DD, I think the odds significantly favor publication in the NEJM and that it's much more risky to be short than long at this time.
Best of luck,
Dan |
