Great question. Inventory is a key component of working capital, typically ties up a ton of cash, and is always the subject of close management by astute companies.
One aspect of inventory management is finding outlets for excess first quality stock (e.g. having five years of an item on hand and being willing to take a hit on price in order to whittle down the balance in the short term) and second quality stock (e.g. items that have been returned, repaired, or exhibit cosmetic blemishes).
The trick is to realize cash on excess inventory without cannibalizing ordinary sales or alienating your distribution network. This can be very tricky indeed. Sometimes companies dump products offshore, other times they seek unusual (for them) paths to market; examples might be Amazon, Etsy, eBay. And not infrequently they sell to third parties that specialize in buying excess inventory on the cheap and turning a quick buck by dumping it elsewhere, using channels they’ve built up over time. In each approach the goal is to find new customers who would not otherwise have been likely to buy your product, or more realistically perhaps to minimize the overlap.
I have no idea if this is what’s going on with Peterson, although it wouldn’t surprise me. Cleaning up the inventory is a very common first step following an acquisition.
