Financial Workout

Seeking relief from the mountain of debt crushing the company, Brown turned to Fifth Street Finance, a middle market hedge fund out of NYC.  Fifth Street was the largest note holder and an agreement was reached that it would purchase Miche and take a monstrous loss of $17.9 million on the outstanding debt.  Big mistake.  Several lawsuits were filed against Fifth Street, subsequent to the Miche workout, alleging shareholder fraud, relating to transactions like the Miche workout, and the SEC opened an investigation. While Fifth Street left control of the company with Miche’s executive team, it continued to hold the purse strings…tightly.  Apparently, Corporate never knew, on a month-to-month basis, whether or not Miche would continue to be funded. 

Marketing Disaster

2015 brought on Kristine Widfeldt and Nicole Langer, Vice President of Marketing and Vice President of Sales respectively. It also saw the firing of key personnel including head designer, Ashley Ulabarri.  Miche’s fall began to snowball with forward facing marketing videos that were anything but fashionable and a Summer catalog that was devoid of color and downright dowdy.  With respect to color, when I questioned the apparent lack of diversity, I was told that, “more than 85% of Miche Representatives and their customers are caucasian” as an explanation.  I was appalled…how can we, as an International company, alienate all those who do not fit within the caucasian label???!!!  Moreover, fashion was eliminated from the Miche brand. The current customer base continued to dwindle as inventory fluctuated and was delayed because of funding (although the dock strike was the excuse given, even after the strike had ended). Dell Brown completely reversed his stance regarding fire selling and program after program was released discounting product drastically and offering product to the field at wholesale.

Losses Continue to Mount Needlessly

In the Fall of 2015, the executive team decided to consolidate the field and placed entire teams under new leaders which caused those leaders to promote and earn large bonuses and commissions.  Many of these transitions violated Miche’s Direct to Corporate Adoption Program’s rules but apparently, that didn’t matter as the executive team needed to be able to demonstrate success. Dell Brown blatantly told leaders at M-Vision 2016 that this move cost the company $100,000.00 at a time when it could ill afford further losses.  To make matters worse, the Executive Team decided to invest in a brand new computer system with a Point of Sale app for representatives. This bold initiative was disclosed at M-Vision 2016, held in January. Mind you, M-Vision was supposed to be a training event for Leaders who paid dearly for airfare and hotel.  The training was sorely lacking.  Sadly, despite the costs incurred for the development of this program, it was never rolled out to the field as the company shut down before release.  

Lackluster Spring Release Sales 

The Spring 2016 collection first debuted at M-Vision 2016 and later released to the public in February 2016, met with lukewarm response.  The Executive team was caught off guard by the lack of sales.  To me, it was obvious – the bulk of the collection was clearly summer product.  Who buys a woven handbag, as well as summer florals and stripes, in wintry February and March??!!  This lack of any fashion knowledge (or common sense) on the part of the marketing department was both insightful and dismaying.

The nail in the coffin was the check that Fifth Street Finance had to write for the cost of the incentive trip in April.  That, together with the lackluster sales of the Spring 2016 release, sealed Miche’s fate the end of March.  

Miche Will Live On – Patents Purchased by Magnolia & Vine

However, there is a light at the end of the tunnel – Magnolia & Vine, a young direct sales company, purchased the Miche handbag patents and are currently developing their own interchangeable handbag.  I was heartened by the news as it would be appalling for this brilliant, unique concept to just disappear.  Nicole Langer joined Magnolia & Vine where she has been able to shine without the dark cloud of lack of funding that was hanging over Miche Corporate.  I signed with Magnolia & Vine and am proud to represent them. It’s a great product with an even better home office.

So that’s the story.  Women who relied upon Miche were suddenly left out in the cold without their businesses.  Some representatives depended on the income of their MICHE businesses and lost everything. It was more than a business…we were a family.  Such a sad day for us all.

On the family end we have been preoccupied with school (report cards two weeks ago), skiing, First Communion Meetings for Matty, guitar lessons etc. It gets hectic!!! Boys’ report cards were good. Matty always does fantastically in his academics and citizenship (for lack of a better term – being respectful, following directions, listening blah blah blah). His teacher, Ms. Cavassa, can’t say enough wonderful things about him. Ryan, on the other hand, had a stellar performance academically but somewhat in the toilet on the citizenship front. He isn’t so much bad or malicious – he just does what he wants to do. So it was a difficult report card to address. How do you punish a kid who is the top student in his class but reward him when he dropped in being courteous, paying attention etc.? What a quandary. I am afraid that he is bored and that adds to the problem.

We are trying to plan a ski trip for the first week of March. Danny and I would like to take the boys out west to Colorado to get some solid skiing in this winter. Focus has to be on whats to do for kids, flight times etc. If it isn’t a kid friendly resort – it isn’t for us. So we are leaning towards Snowmass/Aspen. Snowmass recently implemented multimillion dollar renovations including a giant kid’s center. Flight isn’t too long either and there are lots of family activities. It is so beautiful out there – so wide open and majestic. Absolutely worth pulling the boys out of school for that kind of experience.

Both my boys are digging reading which makes me so happy. I love to read (haven’t necessarily done much lately except for work related) and to me, its the key to knowledge. Matty’s reading has improved dramatically – although he is reading on “M” level according to school, he reads books above that level with minimal assistance. Ryan sounds out words like a pro – I nearly fell off my chair the first time I heard him do it. He has a sound understanding of his letter sounds that he is definitely ready for phonics. This boy will be reading by the end of Kindergarten! Danny has been wanting to take the boys to the bookstore so we went last night. First, we had dinner at Ayan’s Shish-Ka-Bob at the Source Mall. The people there are no friendly and the food is delicious. Imagine our surprise when we looked over at the table adjacent to us and we see Ms. Berson eating dinner with her financee and family! Ms. Berson is Ryan’s kindergarten teacher. Everytime she spoke, Ryan’s ears perked up and he looked over because he could hear her voice. Once they were finished with dinner, we waved hello and she stopped over to talk to Ryan. It was one of the most enjoyable family dinners we have had in a long time.

We headed over to Borders Bookstore and made a bee line to the kid’s section. It is so nice with rugs etc and places to sit and read. Ryan found a couple of books and promptly sat down to read SpongeBob Atlantis Squarepantis and I had to snap a picture of him:Matty is enjoying the Magic Treehouse series. (Hint! Hint! Everyone! Matty’s Birthday alert!) It is fiction but based in historical fact. There are something like 38 books in the series plus research books to accompany certain Magic Treehouse books. He also loved the book, “George’s Marvelous Medicine”, by Roald Dahl, upon which he based his book report project. So I suggested some Magic Treehouse research books as well as some other books by Roald Dahl. I explained if he liked a certain book, then he would probably also enjoy other books by the same author. Danny got some Disney books and we were set.

My real find today is an obscure dance/funk song from 1983. The name of the group was Girls Cant Help It and the song is Baby Doll. One of the girls I used to hang out with, Evelyn, had this on 12 inch but Evelyn was very proprietary – you could never get a copy of a song from her lol. Not that it was easy to do in those days – needed a record player with a cassette deck that you could record with. Trying to find this song before the days of the Internet was like looking for a needle in a haystack but I found it today!!!! They actually have a video on You Tube and here it is: