Epicure Selections files for bankruptcy

There has been a lot of disappointment and, I dare say, anger about the way in which Epicure’s closure was announced. Ambassadors have not received their commissions. Customers have not received their orders. And it will be at least five business days until the insolvency agency communicates with ambassadors or customers, or indeed with employees, as to what can be expected in the long run.

What a way to start the weekend! But it should come as no surprise that this all came down on a Friday.

As a retired newsroom copy editor, I can tell you that the timing is intentional. A Friday announcement about a business closing frustrates the local media because the newsroom A-team will be gone for the weekend, and no one is going to task the B-team with a story of this magnitude. Eventually, the media will want to interview Sylvie Rochette and Amelia Warren, but I am confident that MNP will have instructed them to not speak with the media, or anyone else for that matter.

So, since we are left to stew and imagine the worst for at least a week, let’s try to imagine what the future may hold.

A LIKELY FUTURE

Whether Epicure has been forced into bankruptcy by creditors or has voluntarily filed for bankruptcy, here is my prediction as to how this plays out.

First, the U.S. operation will be shuttered. It hasn’t the same foothold in the States that the Canadian company has in Canada. There simply isn’t enough goodwill in that huge marketplace to tempt anyone to buy the American company’s assets. Creditors in the U.S. will be SOL.

The insolvency agent MNP will seek a buyer for the company’s Canadian assets with the proceeds of the sale of assets going to satisfy secured creditors in Canada. Those North Saanich-based assets include product inventory, buildings, equipment, and intellectual property rights to things like the brand itself, everything associated with the website, all social media accounts, etc.

That new owner will be under no obligation to fulfill outstanding orders or pay outstanding commissions. Ambassadors are unsecured creditors.

And, since that new ownership is unlikely to follow the same business model that was established 32 years ago, as an MLM, and will likely launch as an e-commerce venture selling direct to consumers, it doesn’t need the goodwill of those ambassadors for future revenue.

WHY DID THE COMPANY FAIL?

As for Sylvie Rochette and Amelia Warren, rest assured they have been enduring their own private hell for some time as they tried to right the ship and save the operation. But was the company’s demise truly the result of pandemic-induced supply chain issues? Perhaps that played a role, but I would not be surprised to learn that the company overextended itself by trying to take on the humongous U.S. market.

Why did they expand into the States? Because they had saturated the Canadian market. That’s the basic flaw in the multi-level marketing business model. You reach a point where everyone is a rep, has been a rep, has a mother/sister/co-worker who is or has been a rep. The only ones who make a decent living are those how got in at the beginning and sit atop the pyramid, or the downline.

The bottom line, though, is that there is an entirely different dynamic to consumerism now than there was 32 years ago, and that includes the need for almost instant gratification -- same- and next-day deliver (and free delivery) -- and less dependence on interpersonal relationships and socializing, whether it's in a store or a cooking class. The MLM business model just doesn't work as well in the age of Amazon.