I worked there at one time and thinking there is a 700 percent markup is childish it's lucky if the markup breaks 100 percent... then you talk freight but your the one who buys a 40 dollar item on CL for 5 bucks and 40 dollars in gas to pick it up... 700 percent profit is refined to banks and stock brokers now and then
If he doesn't honor the bet he will probably take a hit in his business from all the negative publicity. In the information age it will be a lot harder for people to just forget that he made that bet.
One of my former customers was very good friends with Mattress Mac when they were youngsters and told me Mac's father was a shyster who got in trouble swindling people. If what you say is true, I guess the apple didn't fall far from the tree. I'll try to verify your story next time I go to the Dallas area.
Maybe he took half that money and put it in the seahawks. It seems there were plenty of ways to hedge that bet so he could make money.
He already paid out the 600k he lost a few weeks ago, so I'd see no reason why he wouldn't pay these winners.
While that may be true and his cash out of pocket isn't $7,000,000, he is losing the opportunity to turn that furniture he gave away into the $7,000,000.
Maybe about a year ago my wife and I were out mattress shopping. Went to a few different places and the sales people at mattress places are actually worse then car salesmen. Gave up. Went next weekend to Gallery Furniture. Best sales person ever. And the delivery was waiting for us before we got home.
Wait a minute, it's betting, the bookie hedges the bets so his payouts equal his income on either outcome and he makes his money on the vig. Wouldn't as many people buy furniture and take the Broncos as the Seahawks? So he sells $14 million dollars of furniture, $7million on the Broncos and $7 million on the Seahawks. If the mark-up from wholesale to retail is 100% he breaks even, anything over 100% and he's making money either way. http://en.wikipedia.org/wiki/Vigorish Average Markup of Furniture? Average markup of furniture is that additional percentage of total cost of a particular furniture. It can range from 40% to 300%; about 100% may be considered 'normal'. A high markup is not the intended sales price but rather the discount. http://www.ask.com/question/average-markup-of-furniture
I don't know why anyone is thinking he won't honor the bet. He made a similar offer a couple of weeks ago and came through. Regardless of one's opinion of him, he has been a staple of the Houston business community for decades. He won't go back on his word.
People didnt pick the winner this time. The deal was, if Seahawks win, you get your furniture for free.
Same deal, the worst he could do with a 100% mark-up is break even, not including free publicity. I mean Gallery's annual advertising budget is probably 20-25 million. (I google this but did not see a cite on a number, I'd be interested to know if anyone has a seen a figure)
Lets say by Sunday morning he knows that he could lose potentially $7M if the Seahawks win. Can't he just place another bet in Vegas for $7M on the Seahawks? So he knows the neg gain will be zero, but at least he wont lose anything.
That would just be hedging his bet. If this is done, then he wins a little bit of cash if Seattle wins and loses a little if Denver win (since Denver was the favorite).
He couldn't simply bet an equal amount in the Seahawks to hedge. You have to consider the vig, spread, and moneyline (moneyline in a straight up bet). If he were going to do this, it would be much simpler to take out an insurance policy.
Congrats to Mac. Lots of people talking about this here, in real life and on facebook. Great advertising on his part. So long as he marked the price of the furniture up 100% + any salesperson commissions/overhead due or associated with the transaction he broke even. He basically diverted his profit into advertising.
I have no idea what their profit margin is annually, but if they really sell 200MM in merch per year, then 7MM is a painful loss no matter how you look at it. Sure he's getting free advertising for this, but that 7MM (which could have bought two Superbowl ad spots) is probably ten times his annual marketing budget. People are talking about his business, which is never a bad thing, but it's not 7MM worth of talk... I can guarantee you that. He dun goofed.
As per FOX 26 interview, there will be two parties to which winners will be invited too...in order to get the refunds. BTW, as per the FOX26 legal team, the prize has tax implications as well. NOTHING IS FREE IN LIFE... And yes he is honoring his giveaway. Im sure that he bet huge on the Seahawks though. Some estimates are close to a million. Good for him.
