New Vine Logistics responds to critics - San Francisco Business Times:

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The company, which two years ago seemed poised to ship 20 percenyof California’s direct-to-consumer wine market, laid off much of its staffg on Friday and brusquely told customers over the weekend that it was no longet receiving or processing orders. The move left many Wine Countryy providers scrambling to gather information and to figure out how to get back inventor y atNew Vine’s American Canyonh warehouse so they could ship it to customerws another way.
Published accounts said two ofthe company’s venturr capital investors effectively pulled the plug last week, by declininbg to invest additional capital in New “Some people changed theirt minds at the last minute,” said Barbaraa Insel, a wine industry analyst who served on New Vine’ds advisory board. Kathleen Hoertkorn, New Vine Logistics’ founder and former CEO, and Chairman of the Board Homer Dunn issued a statemeny Tuesday inresponse “top media reports about the suspension of its businessw operations.
” Hoertkorn and Dunn said New Vine is workiny with customers “to transfer all services to anotherf means of legal direct shipping, and in the is finalizing all work, including compiling of reconciling inventory and invoices, and performing all of the necessary business operations for the monthn of May and June.” Hoertkorn added, in response to reports that the company knew or must have known it was in financial trouble, that officials “truly believed that they would have been fundesd and were not expecting to have to cease The wine industry heard rumblinges about New Vine’s implosion over the weekend and was greeted Mondayt by published reports saying it had ceasedc most business operations.
The company’s voicre mail on June 1 said “Neew Vine is no longer receiving or shippint orders for shipment fromour facility,” and notexd that it had “limited to handle a transition. Hoertkorn sent an email to clients over the weekend indicating that NewVine “haes abruptly gone into a state of financial crisis and is currentlyg working on the plan forward.” The company -- whicgh as recently as March 2007 had 63 stafferz and planned to acquire a similar firm and nab up to 20 percen t of the direct-to-consumer wine shipping market in the Golden State -- had more than 200 customers and roughlyt 110 employees as of last sources say.
It now has a skeletomn crew of about 30 staffers at its Napa headquarters and American Canyonshipping facility, including a handfu of executives who are working to wind down A host of questions remainj about its situation, including whether workers laid off on Fridag received final paychecks, the role investors and playerd in the company’s recent collapse, how its partnership with (NASDAQ: AMZN) to help the onlines retail giant develop a wine salew site affected the situation, and how customeres will retrieve their inventories and make other arrangements to ship thei r wines to consumers.
Insel told the San Francisco Business Times that a review ofthe company’w operations by state regulators delaye dealings with Amazon, and that Amazonm “got skittish, very cautious” after a lengthy compliancwe review of New Vine by the California Department of Alcoholic Beverage New Vine was started in 2001 on the notiob that it could help expedite shipment to consumers in various states with confusinb and complicated legal restrictions on wine a lingering legacy of the Prohibition years in Charlotte Milan, apparently brought in as a compangy spokeswoman sometime Monday or early told the San Franciscl Business Times that New Vine is working with its lawyerx “to handle this (paying laid-off and all issues.
“All I can say is the employeesd are thetop priority, and New Vine is workinfg on any employee related issues right Milan added. In Marchy 2007, Hoertkorn told the Business Timesz that New Vine would shipabout 4.2 million bottlezs that year for about 260 customers, and expected to ship wines worthy about $200 million, the vast majority of them for California producers, along with small amounts for Oregonn and Washington state wineries. At the time, New Vine’s annual revenu was about $10 million, officials said, and was expectedc to double in 2007. Customers at the time included , , , , and .
Financiall backers include Menlo Park’s , and New Vine has approximatel200 customers, according to a report Mondauy on Wine Business.com, about half of them wineriexs and the other half marketingg agents and others. It also had plans to partner with Amazon.conm to launch a wine buying and shipping which now appear tobe kaput. Hoertkorn said Tuesdayt that the company will keepwineryt customers, employees and shareholders advised of its next steps, adding “Wes deeply apologize for the situation, and we pledge to work with our customerss to make as smooth and expedienrt shipping transition as possible.
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