Naiise, a homegrown multi-retailer in Singapore, has closed its last shop in Jewel Changi.
Now, you may think, “another one bites the dust”.
But turns out, the Naiise closure might not be that simple.
Here are 10 facts about the Naiise closure which has caused much hoo-ha in Singapore recently.
All About Naiise
Naiise is a multi-label retailer which started out as an online-only store back in 2013.
Turns out, they weren’t just eyeing the online sphere and the retailer made headlines when it made the decision to go against conventions.
While brick-and-mortar stores were frantically getting online, Naiise decided to expand their operations into physical stores.
Two years after opening in 2013, Naiise launched its first physical store in Westgate and went on to open several more.
In total, the brand opened five outlets in Singapore, including one at the prestigious Jewel Changi.
And for a period of time, their risky move led to gains for the brand.
But it ended soon.
On 11 Apr 2021, Naiise closed its last physical store at Jewel Changi.
A spokesperson for Jewel Changi said that a new tenant has been found to take over the space.
More details will be shared when the new store is ready to open, the spokesperson added.
Naiise also mentioned the possibility of the business winding up after payment delays to its vendors.
And the worst happened: the Naiise website ceased all operations at 11.50pm on Wednesday (14 Apr) and Dennis Tay, the founder of Naiise, decided to place the company on liquidation on Thursday.
Tay also revealed that he is filing for personal bankruptcy.
Naiise’s Years of Financial Troubles
Even before COVID-19, Naiise was already having financial troubles.
Back in Jan 2020, it was reported that several homegrown brands have pulled out or cut back on stocks to Naiise despite it being the biggest platform for homegrown products.
ST went around interviewing vendors and discovered years of constant chasing for payments and debts in the thousands.
According to the report, Naiise has allegedly been defaulting on payments, sometimes for as long as a year.
The vendors reported that Naiise has been facing troubles “as far back as 2016” when the brand started expanding and stocking more brands.
A former Naiise employee who spoke to ST said that, in 2015, when the business was expanding rapidly, they had “no clear direction”.
By 2016, the bills piled up and payments to both suppliers and employees were delayed.
“It was constant firefighting. If we paid supplier A, we couldn’t pay supplier B. The outlook wasn’t great, which is why many of us left in 2016.”
While many partners still stuck by Naiise’s side during the years because it was “one of the few creative outlets available for local products”, some decided to go their own way.
“They say they’re supporting local and helping the design scene but they’re not paying us. I’d rather take back everything and sell on my own; sales might not be as good but at least I can plan my finances better.”
Here’s where the big hoo-ha you might’ve heard about recently originated from.
According to an ST report, here’s how Naiise works together with its partners.
Goods are stocked at Naiise’s shops and sold on a consignment basis.
In other words, suppliers do not get any money for products placed at the Naiise shopfronts.
Only when an item is sold will the supplier earn money from the sales, minus the cut that Naiise takes, which is reportedly thirty to forty per cent.
A Simple Example
Let’s say Goody Feed opens a Mama shop, called Goody Mamak Store.
We have Pokka drinks, Jack n Jill potato chips and bottled Nescafe coffee worth S$500.
However, instead of paying Pokka, Jack n Jill and Nescafe S$500 upfront to buy their products, we take their stocks in and display them on the shelves for free.
In the first month, S$200 worth of goods were sold.
Goody Mamak Store will then pay S$100 to the suppliers, while the remaining products remain on display. The other $100 is Goody Mamak Store’s commission – i.e. our profits to run the shop.
This brings us to the topic of controversy.
Now, if Goody Mamak Store has been operating for six months, and each month, the shop sold S$500 worth of products.
That means Goody Mamak Store should’ve S$3,000 in the company fund.
But the problem is, Goody Mamak Store has no money to pay the suppliers.
Where has the money gone to?
That’s the exact question plaguing Naiise’s partner suppliers.
Their goods were sold at Naiise, which means the platform already has the money to pay them.
In Dec 2020, Naiise founder Dennis Tay emailed some vendors to propose a monthly repayment scheme.
According to ST, he had allegedly promised to pay vendors S$200 a month and asked vendors to be patient with him.
“We sincerely hope that you will be able to be patient with us through this current situation as we are badly affected by the entire downturn.”
However, one of the vendors, Bespoke Parfums Artisanaux, said he soon fell behind on the monthly repayments as well.
The Debt Recovery Service
A debt recovery firm was engaged by one of Naiise’s vendors to recover an amount of over S$10,000.
Because it’s such a “big case”, the debt recovery firm decided to broadcast the process on Facebook.
According to the conversation between Naiise founder Dennis Tay and the debt collector, Tay could be heard explaining that he was unable to honour the debt repayment plan promised to some vendors because of the Covid-19 pandemic and weak retail sales.
It was also mentioned, during the conversation, that both the company (Naiise) and founder’s bank accounts are “empty”.
When questioned about the money from the sales proceed owed to the debt collector’s client, it was claimed that the money has gone to the “staff”.
Another man who was with Tay at the time could be heard saying that liquidators will split whatever assets the company has left with the creditors.
When asked if Naiise is going down the “Robinsons” route, he replied that it’s exactly what Naiise is looking at.
In the end, Naiise reportedly managed to make a partial repayment to the debt collectors.
According to the debt collection service, the partial repayment was made using a fraction of the day’s sales.
That was only one brand.
Other brands had resorted to going to the Small Claims Tribunal to get back their money, to no avail.
One of the companies affected, The LAB Fragrances, said that while the debt was acknowledged and Naiise was ordered to make a repayment of S$500 monthly to the brand from Dec 2020.
Naiise made payment for the first two months and went “radio silence” after.
According to the founder of The LAB Fragrances, Naiise has no intention to make repayment “without being forced”.
It was added that this is a “trademark” of Naiise in the retail circle and Naiise’s payment defaulting behaviour has nothing to do with COVID-19.
“So this behaviour (or bad intention, to put it directly) has nothing to do with COVID-19, which seems to play the main role as their excuse.”
A website was set up to “reveal the truth about Naiise” with several allegations, including the founder and his wife’s luxurious lifestyle, the non-repayment since 2014 and employees not getting paid since 2016. Do note that those allegations aren’t verified by anyone yet.
Not all partners feel the same way about Naiise, however, and brands such as Wet Designs, a homegrown ready-to-wear fashion company, is trying to get brands together to support Naiise.
The brand had reportedly been going around trying to get support for Naiise despite getting “flak” from other vendors.
“If we do not support those who have supported us through the good times and bad, then #supportlocal is just hollow words.”
Unhappy vendors, both Singaporeans and overseas, have also taken to Facebook to air their grievances.
Feature Image: Naiise