By Michael Calia
Shares of Liquidity Services Inc. declined sharply after the
company revealed that Wal-Mart Stores Inc. has terminated its
agreement with the online surplus dealer.
Liquidity Services said in a filing Friday that it disputes
Wal-Mart's claims it failed to comply with service level
requirements and restrictions on the disposition of merchandise,
and it is contesting the termination of the pact.
The company also said it would seek "appropriate relief" from
the retail giant for failing to honor its rights to buy certain
merchandise and any related damages it has incurred.
A Wal-Mart spokesman said the retailer had no further comment
beyond what was in Liquidity Services' filing.
Liquidity Services said that it doesn't expect the termination
of the Wal-Mart deal to prevent it from meeting its financial
guidance for the period ended Dec. 31. Shares of Liquidity
Services, however, fell 24% in late-morning trading, bringing their
year-to-date decline to 66%.
The Wal-Mart termination comes as Liquidity Services contends
with the potential end of its contract with the U.S. Defense
Department, under which Liquidity Services purchases surplus
property. On Monday, however, Liquidity Services and the Defense
Department extended their pact for two months.
Write to Michael Calia at michael.calia@wsj.com
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