A Sydney-based baby wear company Bay Bee Cino has been placed in administration, just three years after undertaking a capital raising and unveiling plans to grow aggressively through franchising.
The company, which operated a prominent online store, two retail outlets in Sydney and shops in New Zealand and Tasmania, was founded by Di Baker and Fred Van Urk and focused on high-end baby and toddler clothes.
In 2008, Baker said the company boasted a network of 500 “consultants” selling through a party plan model and told maternity magazine Cosmo Pregnancy that the company had annual sales of $4 million.
The business is now in the hands of administrator Manfred Holzman of insolvency firm Holzman Associates.
He told SmartCompany this morning that while his investigations into the collapse are still in a preliminary stage, it appears that the business was simply too small for its overheads and the level of stock that the business was carrying.
“I think the concept was a good one but from what I can see I just don’t think they had enough outlets.”
Holzman has suspended the online store and says his current focus is disposing of the stock on hand through a company store in Double Bay. He will then look at selling the brand name.
“We will be seeking expressions of interest in the next week or so.”
Holzman says while there are only a small number of creditors, the amount owed – more than $4 million at this stage – is large for such a small business.
The company, which was originally funded by Baker, Van Urk and a group of high-net-worth individuals, conducted a capital raising in 2007 with Investorlink Securities. According to Bay Bee Cino’s website, this resulted in Aust-China Private Equity Fund investing in the business.
It appears this capital was to be used to fund an aggressive expansion strategy.
“We plan to open 20 franchise stores by the end of 2009 and would like to expand globally,” Baker told Cosmo Pregnancy in late 2008. “We’re also currently developing baby formula for export to the Chinese market.”
Holzman expects to have a report for creditors prepared in three weeks.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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