Childhood friends Brett McCollum and Matt Richardson founded what is now AllTrue in 2014.
Photo courtesy of Brett McCollum and Matt Richardson
Pop onto the website for feel-good subscription box firm Alltrue and you might think the company is still operating as normal. Photos of cheerful people are mixed with bold language about beautiful, sustainable and useful products.
But there’s one very important detail the company hasn’t communicated to potential customers: Alltrue is going out of business. The company, formerly known as Causebox, is liquidating and shutting down, according to a document viewed by Forbes.
Alltrue never announced it was closing its virtual doors, leaving customers desperately searching for answers on Reddit, where a copy of the document first appeared last week. Frustrated subscribers are still waiting on orders they’ve already paid for, while vendors say they are sitting on unpaid invoices totaling at least $1.9 million. The “Reserve Now” button at the top of the website isn’t functional, but users can still submit their email and payment information to join the company’s waiting list elsewhere on the site.
The Los Angeles-based company laid off its entire staff of about 50 earlier this month, according to a LinkedIn post from a former employee, around the same time Alltrue filed paperwork to start an Assignment for the Benefit of Creditors, a voluntary alternative to formal bankruptcy. Since these cases don’t require a public court filing in California, this step can be taken by distressed businesses looking to minimize publicity, says Richard H. Golubow, cofounder and managing partner at Newport Beach-based law firm Winthrop Golubow Hollander.
“[Alltrue] is indebted to various creditors and is unable to pay its debts in full and has decided to discontinue its business,” another document related to the liquidation reads.
Rhaelyn Gillespie, cofounder of Canada-based Mintier, went public with her experience with Alltrue last week in a TikTok that racked up more than 14,000 views before it was deleted. Her company makes sugar-free, oil-based breath mints, and she is still waiting on a past due invoice for a shipment sent earlier this year.
CEO Matt Richardson, who did not make a public statement when the company decided to shutter, confirmed to Forbes on Tuesday night that Alltrue is in the process of an Assignment for the Benefit of Creditor. “Unfortunately, I’m not allowed to comment further at the moment,” he wrote in an email. “The assignee hopes to have an update soon, at which point there will be more information to share.”
Richardson cofounded what is now Alltrue with his childhood friend Brett McCollum in 2014. They billed it as a way to support small, mostly women-run businesses. It developed a legion of loyal fans who joined Facebook groups dedicated to discussing, selling and trading their Alltrue items with other subscribers (the most popular group has 15,000 members). Touting how much they were helping local artisans, both founders landed on the 2019 Forbes 30 Under 30 Social Impact list.
A year later, the company raised an undisclosed amount from Ali Capital, Headline and Bling Capital in 2020, according to PitchBook. None of Alltrue’s investors immediately responded to a request for comment from Forbes.
Alltrue, which changed its name from Causebox in 2021, sold quarterly subscription boxes with all sorts of “ethical and sustainable” lifestyle products—frying pans, vegan leather totes, portable speakers, welcome mats and more. Last year, the company claimed to have more than 300,000 subscribers, each paying anywhere between $50 to $55 per box.
Its carefully crafted image as a responsible company championing small businesses stands in contrast to its actual treatment of vendors, according to 18 that banded together on Reddit to share information and try to get what they are owed when a third party starts to liquidate Alltrue’s assets. Companies expecting to be featured by Alltrue this year never got paid for the products they sent, leaving at least one small business out of $400,000 and on the verge of insolvency. Seven brands say they are owed $100,000 or more. Their attempts to contact Alltrue have been met with silence, five vendors tell Forbes. Though these businesses can file a claim as one of Alltrue’s creditors, it remains unclear if they will ever get a payout or recover their products, some of which are handmade and one-of-a-kind. Altogether, the vendors say they lost 170,000 units of unpaid product from their businesses.
“Unfortunately, creditors will often get nothing or only a small payout,” Golubow, the lawyer, says.
It’s not just the money. These businesses now have to worry about what will happen to their product after it’s sold off to pay the company’s debts. “It can be sold anywhere, for so cheap. It takes away all of our control, our prestige. It’s a little scary,” one vendor says.
Customers, too, are furious. Alltrue gave shoppers the option of paying for a single box, or they could purchase an annual subscription of four boxes for roughly $200. Alltrue also offered additional products as voluntary add-ons each quarter. Amy Colton, a 51-year-old Alltrue subscriber from Baltimore, says she was impressed with its mission and commitment to highlighting environmentally friendly brands and signed up in 2020. She tells Forbes she was mistakenly charged for an annual subscription in December even though she wanted to switch to a quarterly one. She also never received the latest box, which she already paid for twice, or any of the add-on items she expected in April. Now she is now trying to get a $569.55 refund from her bank.
“I tried and tried to talk to an actual human being, but then I did a Google search for Alltrue and I saw on Facebook that it was going under. That’s when I started contacting my bank to try and get some resolution to this,” she said.
While Alltrue’s demise seemed sudden, this isn’t the first time it has faced scrutiny. When it was still named Causebox, the company voluntarily recalled stainless steel kettles sent to customers in early 2021 because they posed a burn hazard. According to the Consumer Product Safety Commission, the company received 122 reports of the kettles releasing hot water or excessive steam, resulting in 18 minor burn injuries. Alltrue offered customers who got the kettle a $20 account credit. At the time, the company admitted to sourcing the kettles in-house while sticking the name of Brooklyn-based artisan brand Rose & Fitzgerald on the bottom of the kettle as part of a licensing agreement.
Pamela Mars, a YouTuber who posted Alltrue unboxing videos on her channel, sums up the company’s demise this way: “I feel they took advantage of people with the mindset of wanting to support small businesses and those who care about sustainability and sustainable products, because that was their whole M.O.”
Source by www.forbes.com
