Administrators have been called in after the collapse of My Baby Warehouse, which has the same owners as a host of other failed companies.
Collapsed multimillion-dollar retailer My Baby Warehouse is continuing to trade but customers and staff are being left in the dark by the owners and social media channels have been shut down.
The collapse affects 11 stores in the Sydney metro area and the My Baby Warehouse online store, with all laybys and gift certificates on hold.
A store manager, who wished to remain anonymous, said staff were not surprised to see the retailer go into administration.
“I’ve watched it go up and down like a yoyo over the years but this time we knew it was going down, down, down,” she said.
“We weren’t receiving stock as regularly as we used to. Once we saw that, we knew the ship is going down, the Titanic is going down.”
The store manager said staff blamed poor management for My Baby Warehouse’s collapse and while the administrators had kept staff updated, the owners had been missing in action.
“Everyone has tried contacting them and they are nowhere to be found,” she said.
The store manager said My Baby Warehouse’s 65 staff were hoping administrators could salvage the business and sell it.
“We just pray and hope every day we come to work that we still have our jobs,” she said.
Links to Arora Group
My Baby Warehouse’s reclusive owner is Ajay Arora. He is the listed director of both Baby Zone (Aust) and BHLS and is linked to other failed businesses.
Ajay Arora and Poojay Arora controlled the collapsed Arora Group, which was embroiled in a court battle with grocery wholesaler Metcash earlier this year.
The Arora Group includes Arora Supermarkets, which claimed millions in damages from Metcash while owing more than $14 million in back rent and supplies.
Eleven of Arora’s 19 IGA supermarkets collapsed.
In a judgment handed down last month, the Supreme Court of NSW found Arora Supermarkets was not entitled to any damages.
My Small Business attempted to contact Mr Arora through his lawyers and accountants but did not receive a response prior to publication.
Social media shutdown
All contact has also been cut off on social media, with the My Baby Warehouse Facebook page pulled down and no updates on the retailer’s Twitter account.
“There was a lot of backlash on the Facebook page so they shut it down,” the store manager said.
“With social media it goes crazy,” she said. “It was putting a lot of pressure on us in-store. The customers [coming into the store] have been very understanding about the situation; they feel sorry for us and they know it is not our fault.”
Struggling with scale
My Baby Warehouse’s collapse comes in spite of a booming Australian baby retail market, with IbisWorld valuing the sector at $487 million, with growth of 16.7 per cent.
Retailers such as Baby Bunting have grown strongly, with a valuation of $230 million upon listing on the Australian Securities Exchange earlier this year but other retailers have struggled, with My Baby Warehouse’s difficulties mirroring the demise of MotherCare in 2013.
Brian Walker, chief executive of the Retail Doctor Group, said My Baby Warehouse was at risk in a market where scale was important.
“Without knowing the exact details of their finances, when you look at the details of the sector the main players are much larger players or mainly online players,” he said. “They were too big to be small and too small to be big.”
Mr Walker said it was surprising My Baby Warehouse went into administration prior to Christmas, which is a time when a retailer can expect to do 20 to 30 per cent of its trade.
He was critical of My Baby Warehouse shutting down its social media channels.
“That’s not a great move from a public relations perspective. It’s not really saying we are a customer-centric business. It is not dealing with the feedback. It is just closing the door on it.”
First published on Sydney Morning Herald December 15th 2015