If you’re like me, you’d have been to a Naiise outlet. The retailer seems to be everywhere, though technically, it only has five outlets in Singapore.
And if you’re really like me, you’d be that someone who enters a Naiise outlet, marvels at all the interesting hyper-local products like the large curry puff plush and the super adorable MRT train plush, laughs at some of the items that brought you back to the 90s and then leaves the shop—empty handed.
Which is why I wonder how the brand survives.
And that is also why this latest news doesn’t surprise me.
Naiise, the Poster Boy for the Impossible
Unlike any sane business in the world, Naiise didn’t follow the rules. It started out as an online platform but slowly opened up brick-and-mortar stores when other businesses are moving the other direction.
According to its founder Mr Dennis Tay, the goal’s to provide “interesting and unique products, a highly personal shopping experience and retail-entertainment offerings such as revolving F&B concepts and workshops that help create a highly sensory experience for our customers.”
But well, whatever floats his boat; according to a recent comment, the founder claims that its core operating revenue grows by more than 40% year on year. The annual turnover, according to a 2019 Business Insider article, is $5 million.
I’m so going to submit my resignation letter and rent a shop to sell chicken rice soft toys.
Reader Bao: Do you know that you can have a turnover of $5 million by selling things online, too?
Really? How?
Reader Bao: Buy $6 million worth of products then sell them at $5 miillion lah
Oh, makes sense.
But that’s not the case for Naiise.
Naiise Hasn’t Paid Some Suppliers Up to a Year
According to several media reports, Naiise hasn’t been paying some of their suppliers for up to a year.
This has led to several suppliers pulling out from Naiise.
Insiders said that Naiise operated based on a consignment basis; basically, suppliers place their items in the shop, and for every sale made, Naiise will take 30% to 45% of the retail price.
Sounds fair.
Another supplier said that the payment term is NET90; that means Naiise will pay the supplier after 90 days.
Sounds bad, but that’s unfortunately very normal in the business world.
And here’s the thing: there’s no clause on what to do should payment does not come in after the payment period.
While this is very common in the business world, it took a whole new level in Naiise.
Naiise Promised Payment But They Didn’t Come
A few brands have come forward to be on the record in a Business Insider article.
Freshly Pressed Socks said that they’ve yet to receive the sales of about $3,000 for items sold from June to November 2019. They have since exited Naiise.
Concrete homeware designer Concrete Everything has $850 worth of payment due from Naiise, and these items were sold in February 2019. According to them, Naiise did allegedly promise to make payment in September or October 2019, but it turned out to be just lip service. They, too, have exited Naiise.
Naiise’s Response
With such strong allegations, Naiise has to respond.
And respond they did.
They apologized for the delayed payment, and explained the reason: “While our core operating revenues have grown by more than 40% year-on-year, we have regrettably experienced a tight cash flow situation due to unexpected delays in payments due to Naiise. Payments to brands for sales at Design Orchard have not been affected. Amid a challenging retail environment in 2019, we have helped more than 60% of our brands achieve positive year-on-year sales growth last year.”
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That’s wordy so here’s a simple version I’ve interpreted: Naiise is good, make lots of money, but got cash flow issue recently as some people haven’t paid them yet.
But of course the question is this: why would anyone has any credit term with them since they’re a retail business? You don’t hear a hawker selling cai png saying that they have a lot of accounts receivables, right?
Well, according to Business Insider, some suppliers do need to pay “rent”, on top of the commission payable to Naiise, to display their items.
But isn’t it a safe bet, since they can just take the suppliers’ money for any unpaid rent—
Reader Bao: Don’t speculate and continue, please.
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Okay.
But it’s hard not to speculate when this isn’t new.
Reader Bao: Nani!?
Naiise Has Defaulted Payments as Early as 2016
According to a The New Paper report in 2018, there has been delayed payments from Naiise since 2016.
Back then, the founder attributed it to…admin issues.
Cue the cat, please.
The reason why we cue the cat is because this is what our boss has told us before: “When a company is having some financial difficulty or decides not to pay, they’ll usually blame it on the admin team and the finance team, and they’ll promise to sort it out within months. And months later there will be no more company.”
But we don’t need our boss to tell us this: anyone who’s worked in sales know would know this.
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Reader Bao: I told you not to speculate.
I’m just relating my experience lah.
But here’s what happened: the reason for the delayed payment back then was that “a lot of data entry was manually done and when people left, the work had to be transferred to others, which led to gap.”
The founder emphasized that it was not due to financial difficulty.
Well, I’ll like you and Reader Bao interpret what’s gone wrong.
2019: Year of the Fallen
Lest you’ve forgotten, brick-and-mortar chains fell like Legos in 2019.
Crabtree & Evelyn first said goodbye to us, followed by Newstead. Then beauty chain Sasa announced their closure that caused many females to cry, and Home-fix followed suit that caused many guys to cry.
So for Naiise to continue standing—it’s an achievement by itself.
Reader Bao: But then again, do you know that you can buy $6 million of products and—
Don’t speculate, Mr Bao.
