UPDATE: Lewis Perdue at Wine Industry Insight has the best article yet published on the closure. His reporting appears more accurate than mainstream newspapers. He’s a blogger by the way. Highly recommended.
Usually I use this blog to express my views and opinions, but today I just have questions regarding the NVL closure.
According to reports in the Press Democrat, quoting an unnamed employee, Silicon Valley Bank was responsible for the abrupt closure of NVL either last Friday or on Sunday. It isn’t clear which.
What is known is that the situation was first brought to light at noon on Sunday by Larry Chandler on Twitter.
Wine and Spirits Daily reports that the closure was brought on by Amazon’s delay in starting amazonwine.com. Megan writes that NVL built out anticipating having to handle the volume Amazon was sure to send its way, and was left hanging when they didn’t launch last Fall as expected.
My questions, given the above, are the following:
1. Some are saying that the inventory at NVL is locked down and somehow unrecoverable. They imply this might cause wineries and marketing agents to go under. How is this possible, and who legally owns the wine NVL had under its roof?
2. Silicon Valley Bank shut the doors on the operation, reportedly. In doing so, they likely imperiled some of their clients shipments. Did they tell their clients ahead of time? And if they did, didn’t they have the obligation to tell everyone in the industry?
3. Why wasn’t NVL more forthcoming to their clients? Clearly they saw this coming, and an orderly wind down stains your reputation much less than the mess many of their clients are currently experiencing.
4. What does this mean for the future of direct shipping? Is this just a blip caused by Amazon, or is it some kind of sign that the direct to consumer channel simply isn’t as healthy as we’ve all been led to believe? You would think that a company doing 60 million/yr in business, coming off years of double digit growth, would be able to weather an economic “storm” of low single digit growth if managed properly. You would think.
So many questions. Anyone have any answers?