BlueSky’s bad deal

The news that multititle catalog mailer/fulfillment house BlueSky Brands had abruptly shut down last month no doubt came as a shock to many people. Even Multichannel Merchant hadn’t even heard about the company’s woes until mid-February.

But for the merchandise vendors and service providers who had not been paid for months — not to mention former employees who told us they’d had trouble getting reimbursed for their expense reports — the writing was on the wall.

What happened to BlueSky Brands, which owned the Paragon Gifts, Bits and Pieces, Bits and Pieces U.K., National Wildlife Direct, and Winterthur gift catalogs, as well as the third-party fulfillment provider AB&C Group?

As our story “Good-bye, BlueSky” points out, insiders say BlueSky failed to get its next level of financing nearly a year ago. Some believe the company got into trouble because its catalog acquisition strategy was too fast and too furious — not to mention just plain flawed, since some of the titles were already in trouble when acquired.

It seems the BlueSky catalogs were then caught up in the vicious cycle of not enough capital to buy inventory, so they couldn’t ship orders, which means they couldn’t get the cash to buy more inventory, print more books, and pay employees and vendors.

By most accounts, though, it was not just another victim of rising costs coupled with the slow economy. The Paragon, for one, was said to be making headway with a turnaround in sales and profits, thanks to a new business strategy, fresh product, and new creative, when BlueSky’s cash crisis put an end to it.

We may never know the whole story of what happened to BlueSky Brands, although judging by the response to our exclusive online coverage of the saga, a lot of folks will eventually have their say about it.

What we do know is that hundreds of people are out of work, many industry suppliers sold goods or provided services for which they will likely never get paid, and many of the company’s fulfillment clients were left high and dry.

What’s more, it looks like the five catalog brands BlueSky acquired in the past three years — most if not all of which had been around for at least 20 years — are history. And that’s one sad story.

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