here
They weren’t a buying group. They actually had very competent buyers, and the underlying fundamentals of their initial products was very promising. HNWI’s (Lakewood standards) were the first round of investors, and they did very competent due diligence. However, the market saturation point for that set of products was pretty narrow, הן מצד the suppliers, and הן מצד, the actual demand. Also, it was very labor intensive to turn around, and the “warehouse” was run pretty inefficiently, which increased overhead (the attitude was we’ll hire until we get the guy who can do it. Now imagine the HR mess).
So they turned to other products. Now the washing machine started spinning water, as most of them couldn’t return over their initial purchase price (I guess that’s buying group style) but the high overhead shot up even more!
Then they bought retail stores in a line they had decent experience with, sunk serious money into it and opened a t****ing company to boot, which was a cause for internal politics, and all went downhill.
In the meantime, the returns on the initial products disappeared to competitors (very common in Amazon, a 2 year cycle for a hot product is considered an eternity). So now nothing was making money, and suddenly the fixed costs of keeping the shop open made them desperate.
At no point did they intend to lose a dime. They had a innocent vision of becoming the next Klein-Pikarski, and understood that they need to take risks. But unfortunately, the risks weren’t calculated and the רבשע wanted otherwise. There were Heter Iskas for every dime. They were non PL.