Painted Tree vendors met with chaos, stolen goods after sudden closure

Small business owners who sold their wares in Painted Tree boutiques across the country are not only losing their storefronts, they’re losing deposits, rent money that’s already been paid, and money owed from sales after the company’s sudden closure last week. 

As vendors scramble to get their goods before landlords lock the doors, they’re also reporting stolen items and months-long financial disputes with Painted Tree that remain unsettled. Here's the latest: 

Painted Tree closes

The backstory:

Arkansas-based Painted Tree bought large spaces – many of them former Bed, Bath & Beyond stores – and leased booth space to vendors for a percentage of their sales. Vendors didn’t have to be on site; Painted Tree handled the sales for them. 

RELATED: Painted Tree closes all stores abruptly, stunning small vendors

It had more than 60 locations across the U.S. when employees showed up on April 14 to find all stores were closing immediately. 

What they're saying:

In the email to vendors and employees, Painted Tree blamed rising costs, shifting market conditions and the changing retail landscape. 

"This decision has not come lightly, and it represents the end of a chapter that has meant everything to us," the message said. "Despite our best efforts and our community’s unwavering support, we have not been able to overcome. We are heartbroken by this outcome."

Painted Tree didn’t respond to a request for comment. 

Vendors left behind, money owed

The other side:

Vendors like Jared Beauchamp, who lost more than $1,500 to Painted Tree’s closure, say the immediate aftermath has been a nightmare.  

Beauchamp, owner of the Salce hot sauce company, was a Painted Tree vendor with booths in three Arizona locations. He said the company waited until all the vendor checks cleared for April’s rent, then shut down a few days later. 

READ MORE: Central Texas business owners looking for answers after closure of Painted Tree boutiques

Vendors have been told they have until April 24 to retrieve their merchandise, but Beauchamp said according to posts in private Painted Tree vendor Facebook pages, not all Painted Tree landlords are honoring that deadline. 

"A couple of posts said, hey, managers aren't getting paid. They're just kind of opening the store out of the goodness of their heart because they know we're there," he said. "Then we started seeing other posts across the country where stores had signs on the doors from the landlords, and people are just stuck in the parking lot. They had Tuesday and Tuesday only, or until Friday only."

According to Beauchamp, it appears that all vendors across all locations will lose: any sales made in April, rent paid for April, and their deposits. Other vendors say they’ll lose more from being unable to access their products, or because the products have been stolen.

Beauchamp said many vendors also had open support cases and months-old financial disputes, with some vendors owed thousands of dollars for sales that Painted Tree said was due to glitches in a new accounting system. 

"The same struggles Painted Tree mentioned in their email that they are facing that led to the closure are the same struggles and realities every vendor is also dealing with," Beauchamp said. "Except now, all the vendors have to deal with Painted Tree stealing from them." 

"Nothing you did on the way out, at the most critical time, said you cared about either your employees or your vendors. Nothing."

Painted Tree headed for bankruptcy

What's next:

In a "Frequently Asked Questions" page sent to vendors, Painted Tree said any money owed will have to be settled through bankruptcy court. 

"Painted Tree anticipates the filing of a Chapter 7 bankruptcy liquidation case," the company repeatedly stated in the handout.  You will have the opportunity to file a proof of claim with the bankruptcy court once the filing occurs for any unused, prepaid rent or other amounts you believe are owed to you. Information on how to file a claim, including deadlines, will be provided as the case progresses."