BlueSky Shutdown: What Happens to AB&C Clients?

BlueSky Brands, which owned the Paragon Gifts, Bits and Pieces, Bits and Pieces U.K., National Wildlife Direct, and Wintherthur catalogs—as well as McLean, VA-based third-party fulfillment provider AB&C Group–shut down last Friday. AB&C’s facilities in West Virginia had employed about 400 workers, according to reports.

There were some reports that BlueSky Brands was going to file for Chapter 11 bankruptcy protection, but there was no record of a filing at press time.

BlueSky’s downfall is bad enough for the employees, vendors, and catalog customers. But what about the multichannel clients relying on AB&C Group to take and fulfill orders? The distribution center’s clients included Smithsonian catalog, Barrie Pace, Bra Smyth, Healthy Directions, and the United States Olympic Committee, among others.

As one former call center rep at AB&C pointed out to MULTICHANNEL MERCHANT via e-mail, it’s not clear who, if anyone, is answering those phones. Plus, the rep noted, some orders had been processed but were waiting to be picked, packed, and shipped on the day the business ceased operations on March 14.

Some clients were lucky and had a head’s up that AB&C might be folding. Many people knew that BlueSky failed to get its next level of financing as early as June 2007, says Curt Barry, president of operations and fulfillment consulting firm F. Curtis Barry & Co. This resulted in significant personnel cuts in senior management as well as in the work force, he notes.

“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. Two AB&C clients last week decided to take the calculated risk that “there was more fact than fiction in the rumor,” Barry says, and opted to find a new service provider.

Working together with the clients’ management, F. Curtis Barry & Co. helped bid out the work, make critical decisions and preparations to move out of AB&C’s Martinsburg, WV, facility. ”Obviously, with less than a week, preparation things had to go right–the transition is ongoing this week,” Barry says.

What about the other clients still trapped inside AB&C’s shuttered facilities? “We have offered to help others make this transition from the closed facility,” Barry notes. “This is complicated by the fact that the facility is closed and they will have to work through legally how they get release of their merchandise and data files.”

Stay tuned—there are no doubt going to be a lot more stories about how the fulfillment clients have handled BlueSky’s shutdown.