I am officially broken-hearted. Miche U.S.A. announced that it is liquidating and closing its doors. But not just broken-hearted… ANGRY. The current executive team ran this company into the ground. But it did not start there…the destruction of the perfect direct sales company started with its founder, Corbin Church. While genius at discovering excellent startup opportunities and bringing them alive, running them was a different matter. Constant over-ordering of inventory, over-the-top conferences, as well as heavy borrowing, and then fire sale after fire sale left Miche in a precarious position. After “stepping down” as CEO, Miche named Dell Brown, a corporate executive from a local MLM company as CEO.
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.
Could it get any whiter?
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.
Carry in February? I THINK NOT!
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.
Interchangeable jewelry and accessory company
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.
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