Just months after Vinfolio created the world’s largest fine wine consumer trading platform, Vinfolio MarketPlace, the firm has been forced to seek protection from bankruptcy.
After very difficult trading conditions in 2009, Vinfolio ran out of cash, forcing CEO Steve Bachmann to seek a rescue package from new investors headed by industry veteran and former CEO of Constellation Brands, Jon Moramarco.
However, the financial problems at the San Francisco-based fine wine retailer, storage provider and cellar management company only came to light after several clients reported that the cheques they had received for wines sold on Vinfolio’s MarketPlace had bounced.
As the news ricocheted around fine wine websites, the company struggled to respond to a flood of queries from anxious customers. It is estimated that Vinfolio’s storage facilities could hold as many as half a million bottles, whose ownership has since been shrouded in uncertainty.
Vinfolio issued a statement confirming the company would continue to operate and that wines held would be safe. ‘Our doors are open and the lights are on. The wine you’ve stored with Vinfolio is your wine, not Vinfolio’s nor its creditors,’ said Bachmann. It was unclear if this applied to wine bought en primeur.
Moramarco, however, was less reassuring. ‘I can’t give any guarantees. As a secured creditor, we’re trying to take every step we can so people are paid for their wines and get the wines they purchased. It will take time to sort.’
Founded in 2003, Vinfolio achieved dramatic growth in the years that followed. Last year it expanded into Hong Kong and teamed up with online inventory management system CellarTracker to create Vinfolio MarketPlace.
This brought together around 135,000 private collections with an inventory of more than 12 million bottles, worth more than $2 billion.
According to Eric Levene, CEO of CellarTracker: ‘Vinfolio has earned a stellar reputation, so I’m surprised and disappointed by these developments. My main interest is to see Vinfolio make whole any customers that I have referred to them via the Vinfolio MarketPlace.’
The dramatic turn of events is a major blow to Bachmann. ‘We’re striving to maximise the odds for a positive outcome as soon as possible,’ he said.
Written by John Stimpfig