BlueSky Brands: It’s Over

Multititle mailer BlueSky Brands evidently did not get the financing it was desperately seeking. The North Kingstown, RI-based parent company of the Paragon Gifts, Bits and Pieces, Bits and Pieces U.K., National Wildlife Direct, and Winterthur catalogs, which also owns McLean, VA-based third-party fulfillment provider AB&C Group, shut down on March 14.

There were reports that BlueSky Brands was going to file for Chapter 11 bankruptcy protection, but there was no record of a filing at press time. Repeated calls to BlueSky Brands CEO Robert Pulciani, Reliant Equity Investors, and all of the catalog titles were not returned.

Former AB&C employees tell MULTICHANNEL MERCHANT that the company’s distribution centers in Martinsburg, and Orange, VA, were closed Friday afternoon. The facilities employed about 400 people; many had not been paid in at least three weeks. The Martinsburg Journal reports this morning that at least two laid-off AB&C Group employees are going to court to recover their wages

Meanwhile, the Website of New London, CT-based The Day, reported on March 16 that The Paragon catalog closed the doors Friday afternoon at its North Kingstown, RI, headquarters and shut down its Westerly, RI, call center two weeks ahead of schedule. (The Westerly operation was to be relocated to AB&C’s Martinsburg facility by the end of this month.)

As for BlueSky Brands’ other catalogs, the Bits and Pieces Website has the same message as The Paragon’s site: “Our site is temporarily unavailable due to routine maintenance. We apologize for any inconvenience. Please try us again, we will be back shortly.”

A spokesperson for Winterthur–the Delaware museum/country estate of Henry Francis du Pont–tells the Westerly Sun that once the organization became aware of BlueSky’s challenges, it terminated its licensing agreement with the firm on March 13.

The National Wildlife Federation Website doesn’t indicate that anything is amiss with the direct arm. But it notes that the organization “has licensed its name and logo to Bluesky Brands and receives a 5% royalty fee for the sale of each catalog item. National Wildlife Direct contributes a minimum of $1 million a year to National Wildlife Federation.”

BlueSky Brands was established as a holding company in 2005 when Chicago-based private equity firm Reliant Equity Investors acquired The Paragon Gift Holdings, parent of gifts titles The Paragon and Bits and Pieces, from a group of private investors. It bought AB&C Group and the direct businesses for Winterthur and National Wildlife in 2006.

The company seemed to collapse fairly quickly: BlueSky Brands failed to get its next level of financing as early as June 2007, according to Curt Barry, president of operations and fulfillment consulting firm F. Curtis Barry & Co. “After that, many personnel cuts were made—both in senior management and in the work force,” he says.

Reports of BlueSky’s troubles had been brewing for at least six months, says Stuart Rose, managing director for Wellesley, MA-based investment firm Tully & Holland.

MULTICHANNEL MERCHANT first heard about the company’s problems in February. Some of BlueSky’s catalog merchandise vendors and service providers reported that they had not been paid for months.

“The week ending March 7, we started hearing a rumor that AB&C Group would not be able to make its payroll for last Friday if it did not come up with some viable cash flow options,” Barry says.

Sadly, the rumor was true, and it appears BlueSky Brands is history.

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