Business
Auditor Raises ‘Significant Doubts’ About B.C. Online Retailer Cymax’s Ability to Stay in Business
With aspirations of becoming the Amazon of furniture, Burnaby, B.C.-based Cymax Stores Inc. has grown into something of a darling in Canada’s tech scene. The online home furnishings retailer was named to last year’s Profit 500 list of fastest growing companies in Canadian Business magazine, and received glowing profiles in that publication and local media.
But a 2015 financial audit of Cymax, issued May 26 by Deloitte and obtained by the Financial Post, paints a troubling picture of the company’s financial position. The auditor found “significant doubt” about the company’s ability to stay in business, which it said could be stemmed by significant outside investment or improvements to sales and margins.
Founded in 2004 by CEO Arash Fasihi, press reports last fall said the privately held company expected revenues to rise to $180 million in 2015, up from $100 million in 2013. However, Deloitte’s audit says 2015 revenue was $156 million.
With as many as 2.5 million visitors a month to its flagship website, Cymax benefits from 97 per cent of its sales being made in the United States and denominated in U.S. dollars. A report by brokerage firm Haywood Securities in June said it generates 61 per cent of its revenue through direct sales.
“We have close to 300 vendors now and we have a virtual distribution model,” Fasihi told the Vancouver Sun in October, 2015. “We don’t stock anything, we have no inventory risk.”
That month brought news of a $33 million Series A funding round in Cymax led by BDC Capital and PlentyOfFish founder Markus Frind, who sold his online dating service months earlier for US$575 million.
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With all these apparent advantages of its capital position, Haywood analyst Pardeep Sangha wrote that Cymax had gone as far as testing the waters for an initial public offering in 2016, but ultimately pulled back because of weak capital markets.
The Deloitte documents show Cymax nearly doubled its debt level in 2015 alone. The company incurred net losses over the two-year period ending Dec. 31, 2015, of $17,436,761, leading to an accumulated deficit of $31,192,365 — compared to an accumulated deficit of $14,778,670 at the end of 2014. The documents also raise the issue of a working capital deficiency of $7,080,192.
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“These conditions indicate the existence of material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern,” wrote Deloitte.
“The ability of the Company to continue as a going concern is dependent upon improving its gross margins realized on sales, continuing to increase its sales volume and cash flows from operations, and reducing its general and administrative expenses, and on the ability of the Company to continue to obtain further financing to fund ongoing operations.”
Bloomberg news reported that Cymax began eliminating jobs over the summer and continued to do so through at least September, according to former employees.
However, one of the company’s lead investors says it isn’t concerned about the numbers in Deloitte’s audit. “As an early stage software investor, many of our companies run losses,” said Robert Simon, Managing Partner at BDC Capital’s IT Venture Fund, in an interview. “What’s important to us in this case is we have a company that generates cash flow through sales, and Cymax is doing great with cash flow. A good comparison is Amazon, which posted losses for many years and focused on growth.”
Simon said that Cymax has not laid off any staff, but that there have been terminations for performance issues. He said the company is continuing to hire up and that growing its business is its chief strategic priority.
BDC Capital also confirmed that Cymax’s investors will be putting additional funds into the company, which Simon said is a sign that “we’re pleased with the progress being made.”
The capital risk Cymax is facing could pose concerns for its customers, as the upcoming holiday season will coincide with an increase in online retail sales but also require that Cymax continue to meet its financial obligations, industry sources said.
Cymax’s lead competitor, Boston-based Wayfair Inc., posted a net revenue of US$2.25 billion in 2015, up from US$1.3 billion in 2014. Wayfair is the largest online home furnishing retailer in North America with more than 7,000 suppliers and more than seven million products on offer. Wayfair, which raised US$300 million via an IPO on the New York Stock Exchange, has a market capitalization of US$3.2 billion.
Cymax and Frind did not reply to requests for comment. Deloitte declined to comment.
Beauty enthusiasts rejoice! Beauty Week at Hudson’s Bay is back in Toronto for another year. It’s time to stock up on all of your fall essentials and, maybe discover some new ones.
From Friday, August 18 to Sunday, August 27, you can expect a truly elevated beauty experience in-store with incredible special offers, limited-time gifts, and exciting activations.
If you’re a diehard beauty lover, you’ll already know that Hudson’s Bay is the place to shop thanks to its extensive range of over 195 skin and makeup brands from both luxury labels and masstige brands — including Tata Harper, Estée Lauder, YSL, Nars Cosmetics, Bobbi Brown, and so much more.
Throughout The Bay’s Beauty Week, visitors can take in some at-counter activations and interactive expert-led tutorials, where there will be chances to get makeup touch-ups from top-tier brands, try a spritz of the most alluring fragrances, and sample tons of new products.
This year’s Beauty Week highlight is the ‘Best in Beauty’ tote, a meticulously-curated selection of 30 deluxe samples from an array of top-tier brands like Dr. Barbara Sturm and Shiseido spanning skincare, fragrance, and makeup — all in a super sleek bag.
The tote, which is valued at over $300, is retailing for just $39 and is a fantastic way to explore new products (without breaking the bank). However, there is a limited quantity, so if you want to get your hands on one, you’ll need to be fast.
Wondering exactly what Beauty Week’s free gifts with purchases entail? If you spend over $95 at Lancôme, you will receive a six-piece set valued at $130. Or, you can get an Estée Lauder gift valued at $170 with purchases over $80. (And that’s just to name a few.)
If you’re a Hudson’s Bay Rewards member, you’ll also get $20 in Hudson’s Bay rewards when you spend over $100 on beauty.
The Canadian Armed Forces (CAF) have several non-combat jobs, some of which do not require a college degree or past work experience.
Life in the forces has several benefits, such as paid education plans (college, university and graduate-level programs), 20 paid vacation days, health and dental coverage for you and your family, maternity and paternal leave, and pension plans. You can learn more about the benefits in detail here.
And to make it easier to gauge if you qualify, the listings also include related civilian jobs to see if it’s your ideal role.
Financial services administrator
Related civilian jobs: Financial records entry clerk, financial manager, accounting technician, bookkeeper, budget officer, cashier clerk, business planner technician, and verification manager.
Description: You’ll help budget resources for all military activities besides providing financial assistance.
Education: You need to have completed Grade 10.
Duties: As a financial services administrator, you’ll be responsible for bookkeeping and managing budgets. You’ll also provide support in accounts payable and accounts receivable.
Work environment: Those in this role work at CAF bases, on ships or overseas. You might also be expected to help special operation units, recruiting offices, schools, and medical organizations.
Postal clerk
Related civilian jobs: Mail clerk, mail sorter.
Description: You’ll provide postal services to members and their families at bases and establishments.
Education: Grade 10. No previous work experience or related career skills are required.
Duties: As the postal clerk, you’ll handle mail duties.
Work environment: Besides a postal office, you may work on a ship or a mobile postal van. You might be expected to serve with Royal Canadian Navy, the Army, and the Royal Canadian Air Force in Canada and abroad.
Dental technician
Related civilian jobs: Dental assistant, dental hygienist.
Description: You’ll be helping dental officers provide dental services to CAF members, their families, and dependents.
Education: Level II dental assisting diploma from an accredited college or a National Dental Assisting Examining Board (NDAEB) certificate.
Duties: Those in this role will be responsible for various responsibilities, including disinfection and sterilization of dental equipment, applying rubber dams, placing cavity liners, and controlling bleeding. In addition, you’ll assist in laboratory procedures like creating casts, custom trays, and mouthguards.
Work environment: This role will require you to work in a military dental clinic, a Mobile Dental Clinic, an Air Transportable Dental System, or onboard a ship. You might be expected to work on a base in Canada or other operations in other parts of the world.
Human resources administrator
Related civilian jobs: Records administrator, data entry supervisor, receptionist, office manager, executive assistant, payroll clerk, and information management technician.
Description: Provide administrative and general human resources support.
Education: Grade 10. No previous work experience or related career skills are required.
Duties: In addition to human resources administration and services, you’ll be handling pay and allowances, managing automated pay systems, and maintaining personnel records.
Work environment: HR administrators work at all CAF bases in Canada. They also work on ships and overseas to support the Canadian Army, Royal Canadian Navy, or Royal Canadian Air Force operations.
Medical assistant
Related civilian jobs: Emergency medical responder, ambulance and first aid attendant, registered nursing assistant, licensed practical nurse, and hospital orderly.
Description: Successful candidates will help treat the sick and injured in CAF units. You’ll be assisting and supporting nursing and medical officers.
Education: Minimum of Grade 11 biology, Grade 10 physics or chemistry, and Grade 10 math.
Duties: You’ll provide initial care and essential life support treatments in trauma cases. You’ll help with health assessments (hearing and vision tests, perform basic lab procedures, etc.) and initiate and manage medical records and reports. You’ll also be expected to provide support and first aid during training exercises.
Work environment: Medical assistants may serve with the Royal Canadian Navy, the Royal Canadian Air Force or the Canadian Army as part of the Canadian Forces Health Services Group. Those in this role are exposed to the same risks as the forces they support.
Porter Airlines is once again stirring the pot among Canadian airline rivals, now going after Air Canada’s Aeroplan members by offering to match their loyalty status to an equivalent of their own.
The beloved airline, which recently ranked as having the best cabin service in North America, challenged the competition for the second time this year, after previously deploying a similar tactic against WestJet in the spring.
Earlier in April, Porter presented customers with a limited-time offer to match the loyalty status of WestJet’s patrons with VIPorter levels.
Now, they’re offering Aeroplan members to seamlessly transition to an equivalent VIPorter Avid Traveller status based on their existing membership tier.
Members can then take advantage of an array of travel perks that come with flying Porter, including seat selection, baggage, and flight changes.
For those currently holding an Aeroplan membership, there are two ways to acquire the Avid Traveller status for the rest of 2023:
Status-Based Match:
- Aeroplan 25K members = VIPorter Venture
- Aeroplan 35K members = VIPorter Ascent
- Aeroplan 50K, 75K, and Super Elite = VIPorter First
Flight Segments-Based Match:
- 5 flight segments = VIPorter Passport
- 8 segments = VIPorter Venture
- 17 segments = VIPorter Ascent
- 28 or more segments = VIPorter First
Members will have to first submit their applications on Porter’s website. Registration will remain open until September 6, 2023.
In order to maintain their membership level through 2024, customers will have until the end of 2023 to reach the following reduced qualifying spend (QS) targets:
- Passport = $500 in QS
- Venture = $750 in QS
- Ascent = $1500 in QS
- First = $2500 in QS
Over the past year, Porter has launched an aggressive expansion strategy, including everything from introducing longer flights on newly-purchased jet planes flying out of Toronto Pearson, free WiFi, and a new all-inclusive economy experience.
With Canadians losing both Swoop and Sunwing as WestJet incorporates both into their mainline business, Porter’s direct competition is welcome to keep prices competitive.
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