LIMBO! New Vine’s Interim Funding From IBG Raises More Questions Than Answers
Dante’s first circle of Hell has a special place called limbo which resembles an eternal dentist’s waiting room where you sit forever and never actually get your cavities filled.
Much the same could be said of the vague, deal-in-progress hammered out Thursday afternoon between New Vine Logistics and Inertia Beverage group.
DEBT AND DUE DILIGENCE NOW, SOME KIND OF “TRANSACTION” LATER. MAYBE.
According to the official news release: IBG “has agreed in principle with Silicon Valley Bank to acquire its debt position in New Vine, subject to due diligence and definitive agreements.”
In an interview with Wine Industry Insight, Jansen said he could not address the issue of why IBG — rather than just Silicon Valley Bank (SVB) — was involved in debt funding of New Vine.
Other sources report that Venture Capitalist Bob Ackerman of Allegis Capital has provided the funds — possibly $5 to $8 million — to take out SVB’s debt position and to fund a re-start of operations.
“We’re proceeding with due diligence as quickly as we can” said IBG President and CEO Ted Jansen “We’re already funding New Vine and want to complete the transaction as soon as possible.”
According to Jansen, the due diligence process would take “somewhere between days and weeks.”
IBG’S TRANSACTION OPTIONS WIDE AND VARIED
Jansen left unspecified how much debt was involved and just what sort of transaction was at the end of the process. “I can’t comment on our intent” he said.
However, IBG’s current position and that of the investors leaves them a nearly clear field of options. Sources knowledgeable in finance and deal making say that there are still other potential suitors in the wings and that some of the many transaction options include:
- Cleaning up systems and finances and “flipping” New Vine to another buyer.
- Completing a merger and syndicating equity among other investors.
JANSEN’S FIRST GOAL: RAMP BACK UP TO SUPPORT CUSTOMERS
“Our main goal is to get New Vine back into operation as quickly as possible to meet the needs of its customers.”
Amazon, Jansen acknowledged, was one of the largest of those customers, but he said he could not comment on the mammoth Internet retailer’s reactions to the New Vine debacle or its intentions.
“Yes, Amazon is important, but we also want to make sure that boutique, artisan wineries have access to the direct sales marketplace,” said Jansen.
EMPLOYEE RECALLS AND BACK SALARIES, FATE OF NVL MANAGEMENT IN LIMBO AS WELL
Jansen said the issues of rehiring workers and making good unpaid wages was up to New Vine. “We’re simply a creditor trying to meet their needs.
He added that that IBG was working with existing NVL management to determine “who is essential to re-start operations” but added that “we [IBG] are not making those management decisions.”
He also sidestepped questions to the ultimate fate of NVL management, saying that depended on due diligence and the completion of the unspecified transaction.
ENTIRE, UNEDITED TEXT OF INTERTIA BEVERAGE NEWS RELEASE
For Immediate Release: June 5, 2009
New Vine to Resume Operations With Inertia Beverage Group Funding
—Immediate Goal Recommencement of Shipping and Compliance Operations—
(Napa, CALIF)—Inertia Beverage Group (IBG) has agreed in principle with Silicon Valley Bank to acquire its debt position in New Vine, subject to due diligence and definitive agreements.
“In order to address New Vine’s customer needs and allow for their systems and operations to get back online and shipments flowing immediately, IBG will provide interim cash funding to New Vine pending final documentation,” said IBG President and CEO Ted Jansen. “Operations are already gearing up and we are confident in the ability of New Vine’s operational team and employees to quickly respond.”
“IBG has from its inception been committed to the direct sales channel as an efficient and profitable way for wineries to access the wine market, better control their brands and expand margins,” said Jansen. “We remain committed to providing leading solutions for the expansion of direct wine sales, on behalf of our clients and the wine industry as a whole, who seek a solution to the complexities of direct shipping.”
About Inertia Beverage Group
Inertia Beverage Group provides solutions for the creation and expansion of online wine marketplaces. Leveraging their proprietary, web-based technologies, IBG gives wineries, retailers and wholesalers the tools necessary to efficiently distribute their products within the expanding direct-to-consumer and direct-to-trade wine markets. Through its REthink EngineTM platform, its free regulatory compliance tool, and Marketplace Services programs, IBG provides its over 500 wine brands access to new marketplaces where supply and demand are united. Recently launched, IBG’s Direct-to-Trade marketplace, WineREvolution.com, provides restaurants and retailers a web-based, fully compliant process to efficiently and legally access a growing list of domestic and international vintners that sell direct to the trade.
# # #
Contact:
Tom Wark, Wark Communications
707-933-9313 • tom@warkcommunications.com
Kristi Taaffe, Vice President, Marketing, Inertia Beverage Group
707-603-2802 • Kristi.taaffe@inertiabev.com
Sent by:
Tom Wark
Wark Communications
tom@warkcommunications.com
www.warkcommunications.com
www.fermentation.typepad.com
707-933-9313-Tel
707-246-6451-cell
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About The Editor
WII Editor Lewis Perdue
is a former Washington, D.C. investigative reporter and has written 20 published books. He founded Wine Business Insider in 1991 followed three years later by Wine Business Monthly. Both were sold in 1997, but remain the dominant trade publications for the North American wine business. In 1997 he became a correspondent for CBS Marketwatch and a columnist for The Street.Com. Later, he worked as a columnist for the Wall Street Journal Online before founding an Internet payments company which went public. He has also been a negociant and a wine importer/distributor. Click here for more on Lew.
Winners and Losers Scorecard from the recent New Vine Logistics Debacle
As a former employee of NVL I thought it key that I share a score card of this whole debacle.
The house of cards known as New Vine Logistics (NVL) is still floundering without a clear media message or story to tell clients nor a detailed go forward plan that everyone feels comfortable with. A month since the closure and speculation of what happens next and still no clear answers from NVL of what happened and why. In the interim a few winners and losers are emerging from the sound of warehouse doors opening and wine leaving the NVL facility by the semi truckloads…
Loser -Katie Hoertkorn: Founder and CEO of New Vine, Former Vice-President of Wineshopper/Wine.com
It is 0 and 2 for Katie or is it 0 and 3? A school teacher from Wisconsin that entered the business world, established herself as one of the first female Vice-Presidents of DHL (A carrier that has all but abandoned the US market due to financial losses in the U.S. this year) was hired by Wineshopper to bring it to brilliance, merged it with wine.com then into bankruptcy, evolved into New Vine now on verge of bankruptcy. New Vine now a possible acquisition or at least debt holder to Inertia Beverage Group also Venture Capital backed and in “transition” for a way forward… Sounds like a pattern here and not one of profitability…
A former business partner was quoted as saying, “Karma” when he heard the story of Katie and New Vines troubles. Don’t know if it is “bad juju” or just not trusting those that supported her early wine career and advised her to change the course, but Katie has a tough history in the wine business that will follow her for a VERY long time.
Losers- New Vine Clients & Employees: Client still around why? Are freak in crazy? Do you not remember what happened when wine.com/wineshopper.com went belly up? Is your wine safe? Heck NO! GET IT OUT! Get it out! RUN! Now, before it is to late!!!!!
And employees? Employees are you crazy how much abuse can you take. Momma does not love you! REALLY she never did, she just abused you. Really get counseling get help! The doctor is in! Open your eyes and just look at the scuffs of her stilettos kicking you in the head! Dedicated clients hoped for success and dedicated employees worked hours for low pay and lower appreciation only to see the company that had so much potential falter in a time of economic downturn. Very sorry to the employees left behind. GET OUT! There are better opportunities and employers that appreciate you. Just seek them out today!
Winner or Looser? Inertia Beverage Group (IBG): You decide! It sounds as if IBG won the race against WTN Services to purchase the debt of New Vine Logistics and the right to gain control. But what did it really win? And did it or did WTN Services see something that made it say….”pass”…. A remaining customer base that is disgusted, disgruntled and does not trust the company, a shrinking customer base as the higher volume and most profitable wineries have left, a company with a major PR problem and a company badly in need of investment into the technology, warehousing and infrastructure that allegedly set it apart. Oh my, did I mention the debt, the lawsuits and the “bad juju” that accompanies the assets of NVL. Winner IBG, yeah right, (good luck sleeping Ted), time will tell but if I was playing Vegas odds….. Well…. I’d bet on the other horses in this race.
Winner- Paul Mabry, VinTank: It sounds as if IBG won the purchase of NVL debt but the real winner is Paul Mabry who is no longer at IBG. Former wineshopper/wine.com guy, founder of IBG and now running the wine industries only wine think tank called VinTank for wine marketing, technology and strategy solutions. Paul built up a great company and left IBG just in time so as NOT to get caught up in the tarnish of confused VC’s trying to hobble together two struggling companies without clear direction. Sound familiar? You saw that movie Paul and took great notes! Looks like Paul learned his lessons from watching the wineshopper/Katie/VC drama of 9 years ago.
Did Paul know what was about to occur with NVL and with the IBG VC’s approach? When he writes his expose’ on the wine industry all the skeletons of the past will come out. Ha!
Paul has clear direction- he is a pioneer pushing for a change in the way wine sales are conducted in the U.S. His vision prevails in this economy more than ever. His departure from IBG and not being associated with NVL/IBG VC’s allows him to assemble like minded individuals and create strategies and processes that will forever change the wine business. Smart guy, big ideas, focus on the prize, it is coming…
Winner- Chris Edwards, WTN Services/1800Flowers: The Vice-President and General Manager of WTN Services, Chris Edwards must be feeling pretty good almost giddy, right about now. Former employee of wine.com and a few in the past referred to him as “a protégé of the Wineshopper (Katie gang)”, he cut his teeth in the wine business working in logistics, customer service and sales and now runs the most recognized and profitable wine services company in the Napa Valley. During the last year he turned his brands around in quality and sustainability. Partnered and hired a respected Vice President formerly of Constellation Brands-ICON, Matt Wood, navigated the purchase of Geerlings and Wade, an addition to his consumer direct portfolio and is now gaining market share from New Vine by being very selective in client acquisition for its services and fulfillment platform. WTN Services is truly a profitable wine services platform. I bet he must be making Lesley Berglund founder proud). Rumor is there is a waiting list of select clients wanting to come to WTN but they are taking only those that “best fit for long term mutual growth of his brands and there’s.” Boy there is a novel concept! Profitable wine company, mature steady plan to client acquisition of the right client mix, backed by a deep pockets company 1800Flowers.com and focused on quality. New Vine board should note this as it sounds like he learned a lot from your folks. No one remembers who designed the first tire but everyone knows the names Goodyear and Firestone. Sounds like WTN Services is following the same path, no one knows who created the first wine sales, fulfillment and services company but sustainable and long term- WTN Services; our bets are on this horse…
Winner- Annette Geisner-Kinch, Bacchus Fulfillment and Peder Arneson Copper Peak Logistics- Annette Geisner founder of Bacchus and former employee of WTN, Peder Arneson, Silver Spoon fed president of Copper Peak logistics. Both solid in the field of fulfillment, both are seeking a unique market niche and have aligned themselves smartly with market leader WTN Services. Each services; a different unique client base and have different approaches to business. Bacchus is very high touch targeted and knows its limits in size and capability. Copper Peak, newest game in town aggressive in stature and made aggressive plays at the NVL release customer base. Both have aligned in a manner with WTN Services that allows each to service a market segment that does not overlap nor compete and ensures quality services offering for the spectrum of wineries that are seeking options to from the New Vine fallout. Smart trio look out Sonoma… er Wineshipping, er Pac N- What?
Winner or Loser?- Silicon Valley Bank- Silicon Valley Bank got bad press and was slammed as pulling the plug on NVL. The reality is the VC firm Thom Vest pulled the funding and understandably with the further projected losses of NVL and the happy spending of Carol and Katie to “scale the company for growth.” Silicon Valley did not pull any plugs what it did was protect it’s shareholder value by ensuring that its secured loans were either protected or sold off their books. Harsh not really, providing integrity to their shareholders value absolutely. A PR nightmare for SVB for a few days but their shareholders will thank them for getting our of the New Vine firestorm that may still develop. Only question remains is what security were the loans really secured to? Does anyone really know the answer? Winner is SVB they got our unscathed and held true to maintaining their shareholder value. Loser is whoever at SVB decided to approve the loans to NVL to begin with. Hope he/she made some better choices with their personal investments.
Winner- WineBlogs, Twitter and Non-Traditional Media- Wine Industry Insight and Wine Business Daily- Who has the scoop concerning NVL? Who knows the real story? The blogs, Twitter and new media outlets of Wine Industry Insight and Wine Business Daily were first out of the gate reporting, updating and telling the world there is a story here. The traditional media, SF Business Times, Napa Register, Santa Rosa Press Democrat reacted to the story following the new media outlets. If the world is not a changed place just look at how this story transpired. You go Lewis Perdue and Cyril Penn you dug, reported and ran with a story that even the Wall Street Journal ended up picking up information from you for.
More winners and losers?
WOW on the winners and losers post! Totally concur!
You have the story completely wrong as usual Paul.
Sadly you were fired by IBG because you were running the company into the ground and were a major liability on so many levels.