This excerpt taken from the NICH 10-K filed Dec 21, 2007.
We sell to better department stores, specialty boutiques, moderate department stores, and national and regional discount department stores and chains. Sales are made against customer issued purchase orders.
Purchase orders may be canceled by our customers in the event of late delivery or in the event of receipt of nonconforming goods. Late deliveries usually are attributable to production or shipping delays beyond our control. In the event of canceled purchase orders, rejections or returns, we will sell garments to other retailers, off-price discount stores or garment jobbers. In the past we have often been able to recover from our manufacturers some portion of our expenses or losses associated with sales below cost for causes attributable to manufacturing problems. We have also historically experienced losses on merchandise that is rejected or returned, but past losses on rejected and returned merchandise have not been material to our overall operations.
Our business is concentrated on certain significant customers. Sales to three customers accounted for 17.7%, 15.3% and 12.8% respectively, of the Companys net sales during fiscal 2007. While three customers accounted for 21.6%, 10.9% and 11.2% respectively of the Companys net sales in fiscal 2006. One customer accounted for 53.1% of the Companys net sales in fiscal 2005. While we believe our relationships with our major customers are good, because of competitive changes and availability of the types of garments we sell from a number of other suppliers, there is the possibility that any customer could alter the amount of business it does with us. If we experience a significant decrease in sales to any of our major customers, and are unable to replace such sales volume with sales to other major customers, there could be a material adverse financial effect on our operations.