News broke on 30 October that department store chain Robinsons announced a sudden closure of its last two stores in Singapore, citing a sharp dip in retail sales and consumer demand. The 162-year retailer shared in a release that they had also begun the liquidation process for four outlets – two in Singapore and two in Malaysia – with liquidators KordaMentha.
Days after the announcement, complaints from suppliers started flooding in, claiming that Robinsons did not reach out to them on the liquidation, owing them thousands of dollars from earlier sales. With the closing down of one of the oldest retailers in Singapore, Yahoo Lifestyle SEA spoke to some of the affected suppliers, Lovera Collections, Push Pan, and Intero-inc, on how the closure affected their company, money owed, and the process behind getting back their unsold merchandise.
“The process was not tedious, but it was messy and there was no proper information given to suppliers on the steps to take to exit our products. This caused most suppliers to panic, especially when liquidators are uncontactable via email or call on Friday.”
Lovera Collections, a Singapore-based tableware store which specialises in unique imported tableware collection, shared with Yahoo Lifestyle SEA when asked about retrieving their stocks from Robinsons. One of the first suppliers to reach out to get back their unsold goods, they managed to recover 95% of their stock on the Saturday following the liquidation news.
In Singapore, consignment deals are a common arrangement used by retailers. Goods from the suppliers are left in the possession of an authorised retailer to sell, and suppliers are only paid after goods are sold to customers.
For Push Pan, managing director Andy Toh disclosed that they managed to get all of their consigned merchandise back but has, however, “outstanding payment due amounting to five digits and are pending for the updates from the appointed liquidator after filing our debts claim.”
In Robinsons’ Facebook post, it was noted that suppliers have to provide evidence that stock is held on consignment before unsold goods could be returned. Evidence in this case, “includes the consignment agreement between you and Robinsons and/or copies of your last statement/invoice/PO from Robinsons.”
Bed linen supplier Intero Enterprises did exactly that and managed to withdraw all of their stocks without issues. The company, however, shared that “for the outstanding owing, we have to go through the liquidation process without any other choices as the company has already filed for liquidation.”
The frustration and hopelessness in recalling the owed debts was echoed by Mr Toh, as the outstanding debts are classified as unsecured debts. “Frankly speaking, looking at the distressed financial status, we just hope for the best on the debts. We are seeking advice from legal advisors.”
Yahoo Lifestyle SEA was also told by Lovera Collections that their invoices from August till date have yet to be paid out. Liquidators are, however, reaching out to vendors to put their goods back for sale. “Nothing is mentioned about the previous invoices owed before liquidators take over Robinsons, which is what everyone is more concerned about.”
Disregarding the sales made before the liquidation notice, suppliers are being promised that they will be paid for sales that are generated from 30 October onwards.
With the COVID-19 pandemic negatively affecting the economy as a whole, Robinsons’ sudden closure, along with debts amounting to tens of thousands for the suppliers, feels like adding fuel to fire.
“This matter has impacted my company so much that we have to freeze all hirings, and may need to implement cost-cutting measures to mitigate the loss,” Intero Enterprises’ spokesperson, who declined to be named, shared. The company let on that the loss includes the cost of goods, which the customers have paid for, and operational costs including their promoters’ salaries and sales commission. These monies were already collected by Robinson but yet, not passed on to the company.
“We have a presence on major e-commerce platforms and our own online store,” Mr Toh shared. “But since Robinsons’ closure, we have been contacted by our customers to expand our brand’s presence in other physical retail stores.”
Having planned out the inventory for the year-end festive period’s increased demand, the closure had affected Push Pan’s purchasing budget for 2021, especially because Robinsons has been one of the brand’s strongest contributors to their physical sales revenue.
All three suppliers that Yahoo Lifestyle SEA reached out did not have unfulfilled orders as products are all cash and carry in store. Bed mattresses suppliers such as Sealy, King Koil, Simmons, and more, which orders were paid but yet to be delivered, have reached an agreement with Robinsons on delivering fully and partially paid products, with each brand having slightly different terms and conditions.
A creditors’ meeting will be held no later than 27 November between the suppliers and KordaMentha.