A leading Dubai-based lawyer has warned suppliers owed money as a result of the liquidation of online shopping platform Sprii that receiving payment may be a long process, and might not be possible at all.
Sprii announced this week that it had appointed Grant & Thornton as liquidators after failing to raise further capital, coupled with an unsuccessful campaign to sell the business.
The move has left suppliers out of pocket, with invoices totalling hundreds of thousands of dirhams outstanding since the end of August.
Michael Kortbawi, a partner with BSA Ahmad Bin Hezeem & Associates, told Arabian Business: “They (suppliers) will all have to wait in line and it is unlikely even if they wait in line that they will get their money.
“It is a lengthy process, but if there was money then there may be a light at the end of the tunnel. You might wait for a year-and-a-half or two, but at the end assets will be sold and you will get your money back.”
Sprii, which was founded in 2014 by CEO Sarah Jones and is based in Mazaya Business Avenue in Jumeirah Lake Towers, started with just two employees around a kitchen table, and grew into a multi-million dollar business with a team of more than 100.
One creditor, who spoke to Arabian Business under the condition of anonymity, said: “Those companies are asset-light so even if they were to go through a liquidation, I’m not sure what assets they have and what the liquidators are going to do. It’s not like companies that have plants or equipment or stocks or anything.
“I think most of the suppliers are hoping for anything rather than nothing, like 70 cents on the dollar or 50 cents on the dollar. You’re always happy because at least you’ve got something.”
Sprii, which was founded in 2014 by CEO Sarah Jones
In September, the UAE-based e-commerce platform Awok.com announced it was closing down, with the company blaming the current global Covid-19 pandemic for sealing its ultimate demise; while in April, luxury e-commerce platform The Modist permanently ceased operations following financial struggles.
“My advice would be for people (suppliers) to hedge their bets as much as possible and reduce their risk by not putting all their eggs in one basket. Try to reduce the creditors’ risk by spreading it thin to different entities and not dealing exclusively with one or two entities,” said Kortbawi.
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