Local multi-label retailer Naiise made headlines in early April this year when it announced its abrupt shutdown due to financial problems.
Multiple vendors struggled to repay, and in January last year, some domestic brands pulled out of their online and physical stores due to payment delays of up to a year.
After widespread news of his financial struggles, Naiise officially ceased operations on April 14th.
Founder Dennis Tay also announced the decision to liquidate the company after eight years of operation and announced that he is filing for personal bankruptcy.
Five months later, Naiise made an online comeback and relaunched its website last night.
Most brands failed to collect their debts
The biggest question that kept everyone reading the above news was: Have they paid off all of their debts?
Singapore’s fine fragrance brand The LAB Fragrances – one of Naiise’s creditors – has debts of over S $ 10,000 that have not been fully repaid to date.
After the Naiise minor court officially ordered the repayment of S $ 10,244, Naiise only repaid S $ 1,000, so we are still owed over S $ 9,000.
– Taylan Torin, founder of The LAB Fragrances
The LAB Fragrances / Photo Credit: Wah So Shiok
Taylan Torin, founder of The LAB Fragrances, shared about his partnership with Naiise and said they started selling with Naiise as early as May 2019.
He admitted that the sales made by Naiise were “actually pretty good.”
“They took the money that was generated by selling all of the products they sell, but didn’t give the contracted portion of that money back to the brands,” he said.
The LAB Fragrances continued with Naiise until July 2020, before they finally lost faith in them after “countless empty promises and all sorts of excuses”, most recently Covid-19.
However, it is now known that Covid-19 was not the primary cause of the retailer’s downfall. In fact, it has reportedly defaulted on payments since 2016.
As a result, many brands view this Covid-19 narrative as a mere cover-up of their mistakes.
Taylan said the micro-branding community was also familiar with how Tay and his wife (who is an ex-director of Naiise) lived a luxurious lifestyle while telling the brands they had no money in the vaults at the same time .
According to a Deloitte document – overseeing Naiise’s liquidation – that Taylan saw, Naiise owed “million dollars” in money over 400 brands.
Deloitte says the acquisition of Naiise’s online assets did not raise enough cash to repay any of the brands.
We understand that the money generated will be used to pay off Naiise’s debts to senior creditors such as landlords and / or banks. Therefore, no brand will benefit from this transaction.
– Taylan Torin, founder of The LAB Fragrances
In summary, Taylan describes the whole experience as frustrating and finds it unfair to micro-brands, which are the most vulnerable.
He cited several reasons for this, such as lack of adequate legal representation, lack of resources to defend themselves, not being identified as “priority creditors” so that they would not benefit from the redistribution of the liquidated assets, and the lack of options to to create and build sales channels so they feel obliged to follow initiatives like Naiise.
He added that the local retail community believed Naiise was exploiting this vulnerability to fund itself.
“At the end of the day everyone gets a piece or two; but nothing is left for these brands. “
Why is Naiise returning to retail?
With the relaunch of Naiise, it is safe to say that Tay is no longer in the picture, as the company has now been taken over by the WestStar Group. The amount of the acquisition was not disclosed.
WestStar Group is an independent, multi-portfolio investment company providing independent and professional investment advice and personalized investment management services to families and institutions of entrepreneurship.
Ong Lay Ann, CEO of the WestStar Group / Image source: ehrlichbee
It is run by Ong Lay Ann, the former CEO of the now defunct Honest Bee. The fact that honest Bee left Singapore (also plagued by financial problems) does not exactly inspire confidence in the new management.
However, in an interview with the Vulcan Post last year, Ong said that he had a fair amount of experience turning around sinking ships.
I’ve already done a number of these turnarounds and reorganizations. I have a track record in doing this. In Australia, I turned a company around pretty quickly. I actually reinstated the management that ran it and (together) we built it from scratch … (until) it is listed on the Australian Stock Exchange.
I am still chairman and major shareholder there today. We acquired a few more businesses along the way and today it’s profitable.
– Ong Lay Ann in a 2020 interview with Vulcan Post
He then also shared his plans to save honest bees by shifting focus to a fast food restaurant (especially a pizza place) and resuming his online grocery delivery business in Malaysia, Thailand, and the Philippines.
Unfortunately, none of these plans came to fruition, and there have been no new movements by ehrlichbee since then.
Can we then trust Ong to do the same for Naiise, who has lost a lot of consumer and brand trust?
As the saying goes: “Bitten once, shy twice”. Regardless, a second chance is only fair and this website relaunch might just be a successful restart for the business.
What is different this time
Under this new ownership, Naiise will remain true to its initial commitment to promoting local design, creatives and artisans.
In addition, the company plans to introduce an “incubator model for young designers” and “buy now, pay later” concepts, which are currently in the pipeline.
Vulcan Post reached out to both WestStar Group and Ong to clarify their business plans to grow Naiise, but have not received any responses.
According to Naiise, over 500 dealers will gradually be presented on its platform. There will be more hyper-local, eco-friendly and independent international brands in the coming months, including new brand launches.
Screenshot from Naoise’s website
Brands listed on the new website include Wet Tee Shirt, Punny Pin Greeting, Ecobar SG, Wick & Litt, Changi Chowk and Petale Tea, among others.
It’s interesting to note that Wet Tee Shirt is listed again as one of the featured brands considering it was also a believer in Naiise.
Since 2019, Naiise has stopped paying the company for its goods, which have been in the “mid five-digit figure” since then.
At the same time, Nicholas Chan, director of Wet Designs, which owns and operates Wet Tee Shirt, has been vocal about keeping Naiise from collapsing as part of his effort to support the locals.
This is actually a key factor for Naiise to survive and thrive – they need to be able to convince and attract brands in order to get listed on Naiise. Without the support of these brands, Naiise will just be an empty shell.
One way to attract brands is to offer merchants a waiver of listing fees and reduced delivery rates on the last mile by the end of this year.
It’s not clear if Naiise will pursue a new business model that monetizes itself purely on listing and delivery fees, but it has also promised sellers that they will be paid “immediately on every successful order fulfillment.”
So far, products have been sold on a commission basis, in which the suppliers are only paid for the goods sold minus a commission of between 30 and 45 percent of the sales price.
Naiise still has a chance to fight
Prior to his saga, Naiise was considered a success story in the lazy retail scene and a pioneer of local designers.
It provided a platform for local brands to market themselves and was the go-to place for quirky and Singapore-related products such as cow-shaped pillows and Singlish slogan t-shirts.
Right now, establishing a purely online presence is a smart move, especially when retailing has taken a huge blow during these pandemic times. It’s important for Naiise to only consider expanding if they have the time and money on their side. After all, rapid growth can destroy business.
Today, Naiise is still helping fill a void for local brands that need to market themselves. Aside from Design Orchard, there aren’t many other such platforms or initiatives in Singapore.
If Naiise helps resolve a pain point, she still has a chance. She just needs to make sure history doesn’t repeat itself, and if her core role is to support local brands then they better stand by it.
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Highlighted Image Source: Naiise
Also read: S’pore dealer Naiise acquired by WestStar Group, led by ex-Honestbee CEO Ong Lay Ann