‘Financials were in chaos:’ A look inside the collapse of consignment chain that closed 60 stores overnight
Earlier this month, the consignment chain Painted Tree declared bankruptcy and abruptly closed 60 locations across the country. Now more than a month later, the local vendors involved are still picking up the pieces. Some struggled to relocate their merchandise, and others are still waiting to receive payment for sales they earned in the weeks before the closure.
The store operated across the country as a consignment bouquet, allowing makers and vendors to sell their goods in Painted Tree storefronts for a monthly rent. According to multiple vendors 614Now spoke with, the company would track vendors’ sales over the course of each month and issue them a payout for the money they earned afterwards.
According to these former vendors, and one former employee, many sellers are still waiting for their April payouts (two weeks’ worth of sales, from April 1-14).
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Meghan Bulau, owner of Snarky Meg’s, operated a space in the Lewis Center Painted Tree, as well as six other locations across the country, making Painted Tree sales a cornerstone source of income for her. She told 614Now she hasn’t been paid the April sales her Painted Tree booths made, nor the security deposit she initially put down for the space, which together equal “several thousand dollars.”
Similarly, the owner of The Effortless Chic Boutique, Renee Ridgway, said she’s currently owed roughly $1,000 (plus the deposit she initially paid and money she put toward April rent) for April sales across the two Painted Tree stores her brand was in: Lewis Center and Crestview Hills, Kentucky. Neither business owner believes they’re likely to be paid, either.
“I’m not planning on it,” said Bulau. “I think we’re all just waiting to see what happens next.”
When Painted Tree representatives were asked about the status of vendor payouts, they provided 614Now with an FAQ sheet that reads:
“Painted Tree anticipates the filing of a Chapter 7 bankruptcy liquidation case. You will have the opportunity to file a proof of claim with the bankruptcy court once the filing occurs for any amounts you believe are owed to you. Information on how to file a claim, including deadlines, will be provided as the case progresses.”
Multiple vendors said they received the same response when asking about their payouts.
In the case of chapter 7 bankruptcy, a trustee gathers and liquidates non-exempt assets, which are then distributed to creditors. The process could take months, and—depending on Painted Tree’s assets— it’s possible vendors receive a smaller amount than what they were owed, or even nothing at all.
A former Painted Tree employee who wishes to remain anonymous spoke to 614Now about why they believe the brand closed, and alleged that a move to a new payment system last October caused issues, stating “the financials were in chaos” for some time.
“Nobody could keep track of leases, payouts, invoices, rents, everything. This meant everything from vendors getting charged rents they didn’t owe to being charged wrongly on spaces they weren’t in, payouts not matching outside math (even with tax calculations), etc.,” the former employee said.
They went on to discuss a number of internal issues they claim to have observed, including poor corporate communication, technology-based issues and a lack of market research.
Outside of money owed, vendors also faced the issue of collecting and storing their merchandise after the closure of Painted Tree locations. All stores shuttered on April 14, and each of the vendors 614Now spoke with claim they were not warned before the closure.
Sellers were then given until April 24 to collect their items, which created logistical issues for vendors with stores in multiple states.
Bulau, who operated two stores in the Washington, D.C. area, paid for a flight to these stores, rented a moving truck, and drove back to Ohio with her merchandise in order to retrieve it within collection window.
”I was just weeks away from signing a lease on my eighth store,” she said. “I’m at least thankful that didn’t happen.”
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