Layoffs, unpaid salaries and CPF kills buzz for honestbee’s staff; plans now for pizza joint
By Theresa Ellsworth
SINGAPORE — Embattled startup honestbee has laid off some 80 per cent of its 130 staff in Singapore even as it struggles to pay salaries for February.
Honestbee is “not in a financial position to make payments in full” to its staff for the month of February, in terms of both salaries and Central Provident Fund contributions, the company said in an email reply to Yahoo Finance Singapore. “The company has kept its employees and ex-staff informed on the company’s position and further updates will be provided in due course,” it added.
Blaming the layoff on the “protracted closure of habitat by honestbee” — the 60,000 square foot concept supermarket launched by the food and grocery delivery company in October 2018 – its spokesperson said the relevant authorities had also been informed of the company’s circumstances and plans.
The supermarket has been shut since Feb 10 due to reduced footfall in the midst of the COVID-19 outbreak. It was due to reopen on Feb 23, but did not.
Despite the unpaid salaries, the plan now is for the company to start a pizza joint along Upper East Coast Road, operating out of a shophouse unit it has leased from chief executive Ong Lay Ann “at market rate” for a year, the spokesperson said. According to media reports, some furniture and kitchen equipment have already been moved into the unit.
“We are still in very early stages of setting up a quick service F&B concept and a tech-enabled convenience store… Details for this are still being worked out, but the store will be focused on fast food service for takeaway, the spokesperson added.
This latest development comes just over a week after honestbee's apparent stand-off with landlord LHN Space Resources when it attempted to remove furniture from habitat's outlet at Boon Leat Terrace in Pasir Panjang. honestbee’s lease was to have run until September this year
The spokesperson declined to comment on the standoff “as the tenancy agreement is the matter of on-going litigation.”
Honestbee launched in July 2015, and quickly expanded regionally, offering grocery services in Singapore, Hong Kong, Taiwan, Thailand, Indonesia, Malaysia, the Philippines and Japan, food delivery services in the same markets except Indonesia, and laundry services in Singapore. Retail and F&B outlet habitat by honestbee opened in October 2018 to much excitement and optimism among consumers and analysts for its automated “NewGen Retail” concept.
However, signs of trouble surfaced the following year, with reports of financial strain, and several changes in key leadership from May 2019, including the exit of founder Joel Sng. Months after Ong took the reigns in July 2019, honestbee found itself in the headlines once again over $1 million in unpaid salaries. Despite injections in capital that have come since, honestbee does not seem to have been able to find its feet.
The start-up is currently under court protection from its creditors, to whom it owes about US$230 million (S$319 million). It is seeking to pass a scheme of arrangement that will restructure that debt.
Despite having some brand recognition, Walter Theseira, Associate Professor, School of Business, Singapore University of Social Sciences, says it might be hard for the financially-strapped startup to make the shift, also pointing out that the quick service restaurant (QSR) space is a competitive one.
“Only deep pocketed start-ups are likely to survive,” he added.
The next court hearing on honestbee’s restructuring is set for March 26. The court will also hear the injunction filed by LHN against honestbee.
Related stories:
Honestbee granted 4-month debt moratorium by Singapore court
Honestbee applies to start court-supervised restructuring process
