Co-founder Janelle Barboza suing Honey Birdette for more than $1 million
A founder of lingerie chain Honey Birdette who was sacked from her position as a managing director is suing the business, its former owner and a retail rich lister for more than $1 million over claims she was warned not to pursue a redundancy payout.
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A founder of lingerie chain Honey Birdette who was sacked from her position as a managing director claims she was warned future job opportunities with the business would be pulled off the table if she pursued a redundancy payout.
Janelle Barboza is suing retail rich lister Brett Blundy, BB Retail Capital, the company’s former owner Bras N Things and Honey Birdette itself, claiming she was short changed when she was bought out of the lingerie business in 2014.
Ms Barboza gave video evidence from the United Kingdom on the first day of the trial in the Brisbane Supreme Court today where she detailed the breakdown of her position within the business.
Ms Barboza said during a meeting in late 2013, Mr Blundy raised a plan to have Honey Birdette take over the shopfronts and some warehousing and business infrastructure used by the failing Diva accessory stores.
“There wasn’t really a lot of discussion, there was no go ahead,” she said.
“He basically left it hanging for us to decide what we wanted to do with that.”
Ms Barboza said she was concerned the investment in opening the new Honey Birdette stores would drive down the shareholder price in the short term and that previously agreed shareholder buyout dates that dictated when she could be bought out of the company, would need to be shifted.
Ms Barboza said she did not agree to the plan during the meeting and that fellow Honey Birdette co-founder Eloise Monaghan raised concerns about part of the proposal which included Diva retail staff being transferred to Honey Birdette lingerie stores.
“Eloise was quick to say that basically no that couldn’t happen, they didn’t fit the Honey Birdette look,” Ms Barboza said.
“They were also a lot younger, some of them were under 18 and because of the nature of our products we did only hire girls that were over 18.
“I agreed with Eloise. I backed her up on that argument.”
She told the court she and Ms Monaghan went for a drink after the meeting where they discussed their surprise that Diva stores were closing.
“The discussions mainly were around Diva and the shareholders agreement and we both agreed the (buyout) dates needed to be changed if this was going to go ahead,” she said.
Ms Barboza said in September 2014, she was told by businessman Ray Itaoui that Bras N Things had chosen to exercise its right to buy her out of Honey Birdette in the wake of a breakdown in a relation between the two co-founders.
“I was shocked at this news, I asked him why and he said because you can’t work with her (Ms Monaghan),” she said.
“I was quiet for a bit taking it all in and I was upset at the news, I’d worked very hard at Honey Birdette to be bought out this way.”
She said Mr Itaoui told her they planned to expand the Honey Birdette business separately in the United Kingdom and that she would be invited to buy in to that business.
“He was advising he was going to buy me out of Honey Birdette Australia because Eloise and I couldn’t work together and that I was going to be offered buy in and Eloise was not,” she said.
Ms Barboza said months later in November after she had been bought out for a figure lower than she had expected in forecasts, she again met with Mr Itaoui.
“He then proceeded to present me with two documents - one being that I resigned from a director of Honey Birdette Australia,” she said.
“And he also handed me a termination notice with four weeks notice period that I would be paid out four weeks.
“He told me as he handed them to me that I needed a break and that we would talk about the UK in the new year.”
Ms Barboza said she told Ms Itaoui that because there was no new company for her to go to, she was entitled to a redundancy payout of six months’ pay rather than the four weeks listed on the letter he had given her.
“He seemed a bit shocked at that,” she said.
“He proceeded to tell me that Honey Birdette can’t afford to pay me a redundancy.
“I replied: ‘Well that’s not my problem anymore is it Ray?’.”
“And he replied: ‘Well if you want a redundancy, then the UK is off the table’.”
Ms Barboza, who co-founded the business with Eloise Monaghan in 2006, is suing for more than $1 million.
The trial continues.