retail | Sep 1, 2023 |
All your Mitchell Gold + Bob Williams questions, answered

Last weekend, the overnight shuttering of Mitchell Gold + Bob Williams shocked the industry. The brand, founded in 1989 by Gold and Williams, had long been a favorite for designers, both for its tasteful contemporary style and the values—good working conditions for employees, a boldly public embrace of LGBTQ rights—it embodied. As a result, news of the abrupt shutdown was met with a mix of both sadness and confusion.

How did this happen, and what does it mean for designers? We’ve rounded up answers to some of the industry’s most pressing questions. Plus, in a special episode of The Business of Home Podcast, company co-founder and former CEO Mitchell Gold shares a candid look at the company’s struggles and offers some insight into what might come next.

Update: Since this story's publication, Mitchell Gold + Bob Williams has filed for Chapter 11 bankruptcy. Subscribe to our newsletter to stay abreast of developing news on the brand.

Why was the company struggling?
After Gold left as CEO in 2019, MG+BW struggled with a difficult transition to new leadership, and was burdened with expensive leases and an excess of inventory. When Covid hit, production and supply chain issues added an element of chaos. Finally, the ending of the home boom in February 2022 heavily impacted sales.

As a result of its struggles, the company was short on cash. According to Gold, MG+BW asked its bank for two successive increases to its line of credit toward the end of 2022. Then, the company’s private equity owner, The Stephens Group, put $20 million into the business to help fund a restructuring effort this summer.

Why was the shutdown so abrupt?
As MG+BW’s struggles continued into the summer, Gold says the company’s bank and The Stephens Group disagreed about who would finance its continued operations. Toward the end of August, the bank abruptly cut MG+BW’s line of credit and limited its ability to disburse funds. Suddenly unable to make payroll or pay its vendors, the company’s leadership shuttered its factories and laid off its employees over the weekend of August 25.

What happens next?
Gold is currently looking for investors to finance a revitalization of the company. He’s seeking roughly $20 to $30 million, money that would be used to pay down the company’s debt to the bank and fund continued operations. Gold describes the effort as a race against time—the longer the factories and stores remain shuttered and as employees find new jobs, restarting the company becomes increasingly challenging.

If a white knight investor doesn’t emerge, it’s likely that The Stephens Group will liquidate the company’s assets and use the cash to pay back the bank and recoup some of their own losses. Yesterday, it filed paperwork in Delaware to push the holding company that controls MG+BW into Chapter 11 bankruptcy. The filing is light on detail, though it pegged the company’s debt between $10 and $50 million.

What will happen with in-process orders?
Gold says that roughly 4,000 customers have open orders with the company. It’s not clear how many pieces are in limbo. Designers with open orders have told BOH that there has been no communication from the company—unsurprising, as there are almost no employees currently working.

If Gold is able to secure capital and restart the company, he says he hopes to make good on the company’s outstanding orders—though much depends on the terms of any potential deal. If The Stephens Group moves to liquidate the company’s assets, the picture becomes even murkier, and recovering either finished product or cash deposits would likely happen through an eventual bankruptcy proceeding.

Speaking candidly, Gold says that designers with open orders should consult with their lawyers to discuss the situation.

What’s happening to the company’s employees?
The vast majority of the company’s 500-plus employees were laid off over the weekend, including factory workers, retail staff and much of the corporate office. According to a former employee with knowledge of the situation, many of the company’s skilled factory workforce is being actively pursued by other manufacturers in the area—so even if the company is revived, it won’t be back up and running at full force.

Listen to the discussion with Gold below, or subscribe on Apple Podcasts or Spotify

Homepage image: Courtesy of Mitchell Gold + Bob Williams

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