Since our last update in November, there have been a few key changes with Bear Butt that we’d like to update you on.
Bear Butt is in a very bad spot. It has been since early last year when we learned that we under preformed in our Kickstarter backing, the poor Kickstarter ad & marketing performance, the additional costs of USA manufacturing, having to move all the product back to China, and the poor performance of sales in 2018 for core products to come in and help with the other misfortunes with the Kickstarter, and more.
Rough Accounting of how funds were spent:
- ~$50,110.99 on KS materials/shipping (this includes materials, shipping and travel for the $178k orders to the USA and back to China)
- ~$99,927.25 on KS marketing (includes Kickstarters cut, advertising, influencers & partnerships)
- ~$24,201.00 in KS returns
- ~$83,446.29 on KS machines (sewing and printing machines to make the Kickstarter products [we had more machines that took care of making hammocks])
- ~$118,371.87 on payroll and benefits for work directly related to the KS on product development, operations, marketing and design in preparation for, during and after the KS
- ~$376,057.40 rough total towards KS *note this isn’t including the total other costs of operating the business before, during and after the KS
After meetings with numerous advisors, the small team focused much of 2018 on cutting costs and increasing sales to get Bear Butt profitable, in addition to getting the products back to China to be manufactured. Unfortunately, even with their efforts - and the improvement month over month - it didn’t work. Bear Butt ended up losing $1M+ in 2018.
During this time, the Kickstarter materials were sent to China, and manufactured by key partners there for fair prices (with the intention to get the products made at a high quality and a fair price). They are currently waiting at the manufacturers warehouses for a final payment for the release of goods and shipping from China to USA and from USA location to you (~$66,836.48).
Around the end of last year/beginning of this year, the team switched gears to finding a buyer for the business, someone who could come in, with experience in this kind of thing, infuse some cash and get Bear Butt rolling again. Unfortunately, those potential buyers decided not to buy it last week.
Right now, Bear Butt does not have the cash to release the goods in China and get them shipped here, nor does it have the funds to refund all of the backers.
This puts everyone in a terrible spot, and the options look grim. Bear Butt has numerous liabilities that will most likely move to foreclose. The Options: 1) an ABC where a 3rd party company will come in and divide out the assets, 2) Chapter 7 bankruptcy, or 3) Chapter 11 bankruptcy. All of this scenarios are bad, and unfortunately do not yield you getting your gear or a refund. For this will sincerely apologize.
We have been clear with everyone from the beginning on the struggles of this project as we learned of them (including the USA manufacturing not working out, moving everything back to China, etc.). But, we had hoped and pushed for fulfilling the KS even through all of the struggles. There are risks associated with backing a Kickstarter campaign sometimes they fail, sadly this one failed. You all have every right to be mad. We understand that. We did our best to fix everything and get the campaign fulfilled. Unfortunately, given the circumstances that won’t be possible. And, after considering all the options of trying to make it right, we decided upon the best option.
There are 1544 backers that have not received a refund or are still remaining. For those of you, this is our option:
- There are 1132 hammocks and 4400 straps in Amazon right now (they are still selling so this number may change by the time you get it).
- In order to reimburse you the best we can, we invite you to email Kaye with your name, color hammock and straps you want (search Bear Butt on Amazon to see available colors), your mailing address and phone number @ Kaye@BearButt.com to have her send you a hammock and straps from Amazon.
- This is on a first come first serve basis until we have no more hammocks/shipping money in Amazon left. (ex. We only have ~100 blue/gray hammocks left)
This solution is our best effort to repay our KS backers.
Among the backers are our friends and family, you are people we care about, appreciate and are grateful for your support. Now matter what, this is a bad situation, and we feel terrible about letting everyone down. We apologize. This is not how we wanted it to go down. In fact, we poured in hours trying to bring this to fruition. Sadly, it wasn’t enough.
Feel free to reach out if you have any questions: Kaye@BearButt.com