In light of the COVID-19 virus outbreak in Singapore, honestbee announced last month a temporary suspension of operations for its habitat supermarket at Pasir Panjang due to a “significant reduction in walk-in traffic.’
It said that it will close habitat until February 23, but later extended it to February 29.
Despite the closure, honestbee said that its online grocery delivery services will still remain operational. It added that while habitat remains closed, the company will take the opportunity to improve its technology infrastructure to enhance customer experience.
Separately, Kenneth Forbes, vice-president of habitat, resigned from the company in the last week of February. He was previously the general manager of habitat, and declined to comment on his reasons for departure.
Habitat Furniture Found At Honestbee CEO’s House
On March 2, Business Times reported that honestbee had cleared out its furniture and fixtures from habitat.
Honestbee’s lease is supposed to run until September this year, so reasons for the premature closure was unclear. However, what’s clear is that landlord LHN Space Resources is unwilling to extend the lease.
According to BT, honestbee has S$1.97 million worth of furniture and fixtures, S$3.87 million worth of store equipment and over S$84,000 in office equipment as of end-January.
However, Vulcan Post received an anonymous tip-off that furniture from habitat’s private dining room was transported to honestbee CEO Ong Lay Ann’s house instead.
These furniture were piled on a lorry, which was found parked in the driveway of his two-storey corner terrace. (Editor’s note: The house and road sign have been blurred out to protect his privacy)
It’s unclear what arrangements were made for these furniture; it could be that Ong was simply temporarily storing the furniture at his place.
Honestbee Knee-Deep In Debt, But Its Goods Are Taken For Free?
Multiple sources close to habitat also revealed to Vulcan Post that honestbee management and executives were spotted freely taking goods belonging to habitat, such as groceries, cutleries and furniture, for their personal taking.
Based on their understanding, these key executives did not pay for any of these items.
Later on February 11, honestbee’s HR department sent out an email to all employees informing them of an “internal sales event”.
According to the e-mail, the Grocery team conducted a “staff sale” on February 14 to “reduce wastage of perishables and items with short shelf-life during the temporary suspension period.”
Employees could also purchase “excess equipment and office furniture” from the old office at Delta House such as laptops, tablets and office chairs.
On the other hand, a CCTV footage at habitat leaked to Vulcan Post showed Ong and wife helping themselves at the beef counter, personally cutting and packing meat. Anthony Ung, honestbee’s vice-president of corporate strategy, was also present.
The anonymous source shared that they had purchased the premium-grade beef at “way under cost value”.
Later on February 22, the couple was seen returning to habitat together with their family. The footage showed that they were leisurely browsing and picking out items from shelves.
The group was then seen pushing the trolley full of goods to the carpark and unloading them into a car.
According to the anonymous source, there was no records of purchases made on that date, which begs the question: did they pocket these groceries for free?
Honestbee Axed Around 100 Singapore Staff, Owing Salaries
On March 9, honestbee laid off around 80 per cent of its staff.
Out of its 130-strong headcount, it axed around 100 employees. Most of those affected were habitat’s operational staff in culinary, service, retail and warehousing.
The above “notice of redundancy” was e-mailed to all affected staff on March 9 at 6pm.
When Vulcan Post spoke to 11 of the retrenched staff, all of them said that the notice came as a shock. There was no prior notification, and they were upset that the company had no decency to inform them of this heavy news face-to-face.
Foreign workers, especially, was flustered when their work passes was immediately cancelled.
Basically, no one saw it coming. In fact, one ex-employee said that the “budget for each department (was) still in place.” He stressed that it was business as usual — since honestbee’s online business was at its “peak”, there was “continuous ordering and replenishment.”
Another said that since honestbee had previously retrenched Singapore staff, he didn’t expect another round of retrenchment so soon. The previous exercise already saw each department downsized to only 2 to 3 per cent, he added.
Following the termination, honestbee said that it will pay all affected staff “one-month notice”. Currently, affected staff are owed salaries for the months of February and March.
Honestbee said that the closure “has made it difficult for the company to commit on payment terms until further funding can be secured”, but it has “no intention of shortchanging its employees”.
The firm had been anticipating a cash injection of around $50 million from a “retail conglomerate”, although that deal has stalled due to COVID-19 and restructuring concerns.
Speaking to Vulcan Post, the ex-employees said that they have no confidence that they will be getting the money anytime soon, especially when honestbee did not provide them with a repayment schedule.
Uncertainty And Confusion Among Employees
Prior to the layoff, the ex-employees said that company morale was very low because “there was no sense of direction”.
“(The office atmosphere) was grim and uneasy. It started to feel like everything was going downhill very fast,” said one, adding that the management did not help to keep company morale high.
“Hushed conversations were going around, and when staff asked for updates, (we didn’t get any) replies. Not really knowing what was really happening made it uncomfortable to work.”
Another ex-employee agreed that there was a lack of communication and updates from the management. Since the company did not provide clear communication on the business plans, there was a lot of uncertainty.
“Questions on the plans goes unanswered from the top management (so) staff’s only source of information comes from the news,” he added.
When asked why they didn’t choose to quit after news reports of the company’s financial troubles surfaced, most said they initially had faith that honestbee would be able to pull through.
“Top management painted an excellent future for the company, (with) claims on potential investment and work on the restructuring and relaunch plans,” said one.
Since there were “promising words of investment and funding”, they believed that there is a chance for honestbee to rebuild the business.
Some also said that they had attempted to apply for other jobs but it was difficult to secure one. The recent COVID-19 outbreak made matters worse because it dampened the job market further as many companies froze their hiring.
For the foreigners, it was especially hard for them to look for another job in Singapore due to the foreign worker quota.
Looking back at the retrenchment, many were angry at the way it was handled, with no consideration for the employees’ well-being.
“They are so heartless to the staff that (has) helped them throughout (all these years),” one said.
“It would have been better if the management had updated the staff regularly rather than giving this false facade that everything was fine.”
Habitat No Longer In Bees-ness, For Good
On March 10, honestbee confirmed that it will be suspending its multi-million habitat supermarket.
In an earlier court document, Ong said that honestbee is already considering the permanent closure of habitat as the space incurs “significant overheads and working capital.”
This closure however, is in contrast to previously-announced plans to revamp the supermarket and the app. In October last year, Ong shared plans to refresh habitat’s selection to reposition it in a more premium category, and also build a standalone app.
What’s also ironic is that this “new-gen retail space” was once cited as a cornerstone of honestbee’s turnaround plan, and was meant to be a showcase for investors.
Moving forward, honestbee has shared plans to pivot to a pizza joint along Upper East Coast Road.
It will be operating out of a shophouse unit it has leased from Ong himself “at market rate” for a year.
Not much details about the pizza joint is known at the moment because they are still “in very early stages of setting up”. What’s clear is that it will be a quick service F&B concept and a tech-enabled convenience store.
The concept will be similar to habitat — they will be leveraging on its previously developed F&B concepts and capitalising on existing technologies to spin-off quick-service restaurants (QSRs).
These include the click-and-collect functionalities, Scan and Go feature, and its proprietary BeePay wallet.
“We also have ready developed hardware and software infrastructure that can be repurposed for our new honestbee concept including our digital kiosks, POS systems and honestbee app. This means that we will be operating at lower costs from the get-go,” said an honestbee spokesperson.
Honestbee’s next court hearing on its restructuring will take place on 26 March 2020.
It is still under court protection from its creditors, to whom it owes about US$230 million (S$319 million), and is currently seeking to pass a scheme of arrangement that will restructure that debt.
Featured Image Credit: Vulcan Post
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