By Elisha Sauers
The Virginian-Pilot
WWR Article Summary (tl;dr) For the first time since “House of Maya” went out of business in late August, its owner Maya Holihan is talking publicly about the cascading financial struggles that led to the chain’s collapse. It started with a dream of being the go-to brand for weddings; it ended with her losing not one, but two houses.
The Virginian-Pilot
If only the Retail Alliance had a crystal ball when it offered a seminar featuring one of its star business owners.
Maya Holihan, of House of Maya Bridal Salons, delivered a web presentation for the association last October on growing a business. By all appearances, she was the expert.
The entrepreneur, who began as an employee at a Norfolk bridal shop, bought the store from her former boss in 2004.
A decade later, she opened another store in Suffolk, and the next year acquired three more boutiques in Virginia Beach and Ghent. She expanded in other ways, too: a magazine, a wedding planning franchise and a bridal show.
Suddenly, Holihan had an empire.
Her presentation warned of the risks of expansion: “Are you willing to take two steps back to take five forward?”
Perhaps that was in the back of her mind when she announced in February her shops would consolidate under one roof: Pure English Couture, Silk Bridal Studio, Privee Bride and Maya Couture on Main would close. There was talk then of the flagship off North Military Highway being converted into a warehouse for a new wedding resale website.
In June, the Retail Alliance reposted the presentation in its blog.
“You can’t wish away the problems,” Holihan had advised, “because if you try to do that, the only problem you’ll have is going out of business.”
Two months later, she did go out of business, with House of Maya crashing like a house of cards. Some disgruntled customers speculated about the financial strains. A bride’s sister suspected trouble when the staff said the Chinese New Year caused delays on a wedding gown.
To the outside world, the closure came as an utter shock. The failing business eluded even some of the most-connected business leaders.
“You don’t know what really happens once you peel back the layers,” said Ray Mattes, president of Retail Alliance, the largest merchants association in Hampton Roads.
Holihan, who sat on its board, never had to provide a financial statement for her position.
“There’s no way we could vet out whether they were wise expansions or not,” Mattes said.
For the first time since House of Maya went out of business in late August, Holihan is talking publicly about the cascading financial struggles that led to the chain’s collapse. It started with a dream of being the go-to brand for weddings; it ended with her losing not one, but two houses.
“The hardest part of being an entrepreneur or the leader of a company,” she said, “is you have to remain positive when the walls are crumbling around you.”
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The other house of Maya
If you strolled past a sumptuous Norfolk mansion on Broad Creek today, you’d see chipping yellow paint, slats missing from shutters and a padlock on the door.
On that August weekend after Old Point National Bank took over Holihan’s retail assets, which were used as collateral on a loan, Holihan, 44, said her family also was forced to move out of her home.
She and her husband, Navy pilot Robert J. Holihan, owned one of the oldest houses in the city, built before the Revolutionary War. They bought it for just under $500,000 in October 2014, according to property records.
The U.S. Department of Veterans Affairs now owns it because of a V.A.-guaranteed loan. Broker Jonathan Melvin said it’s “incredibly rare” for a historic, waterfront house like Poplar Hall — it has a name — to go into foreclosure. The agency plans to put it back on the market within weeks.
Since the business closure, Holihan has been difficult to find. She didn’t attend court hearings for lawsuits alleging she and her business owed money.
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So far, judges have ordered her to pay about $200,000 in rent and more than $30,000 in credit-card debt, not including interest and fees. Previous employees and vendors also have sued, adding up to about $15,000. Some litigation is still pending.
About half of the rent she owes is for side-by-side storefronts she leased in Suffolk. Holihan was ordered to pay the amount she would have spent if she had stuck with her contract through 2020. Recently in the window of her empty space was a bill notice from a security service for $124.47.
The “walls” started crumbling two years ago, Holihan said. She had opportunities to buy three competing bridal shops. All offered different styles and prices, she said, so they seemed like worthy investments. Soon after buying those businesses, she realized two weren’t making their production costs, she said.
In hindsight, “I probably wouldn’t have acquired the third store, which was Privee,” she said, “and if I had done a little more research, I probably wouldn’t have bought the other two stores.”
By the end of 2015, Holihan knew she needed major changes to save the company. Her Ghent landlord said in a lawsuit that she had failed to pay rent as far back as November 2015, a claim which she disputed in a recent interview. She had signed the Palace Station lease in July of that year, according to an affidavit from the property’s manager.
But even after that, House of Maya continued to grow. She took over the Uniquely Yours Bridal Showcase in 2016. Holihan said it was a small, seller-financed acquisition and cost about $10,000.
She said she attempted to raise money from investors. When that wasn’t fruitful, she tried unloading Pure English, but it didn’t sell. Earlier this year, she pulled everything into one store — agreeing to a lease of $24,000 a month, according to the bank — and closed the other shops. Holihan said she cut her staff of 34 to 16.
“I thought that would be the determining factor in changing everything,” she said.
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Start of a “P.R. crisis”
The consolidation didn’t immediately sound alarms.
Zach Miller, founder of Hatch, which mentors small businesses, said when he heard Holihan was moving downtown and closing stores, it made sense.
Just a couple of months earlier, his company had honored Holihan as a Small Business Champion Award finalist. If a company can reduce its footprint, that could lower overhead and increase profit.
Mary Miller, president of the Downtown Norfolk Council, was thrilled when House of Maya announced its move to Granby Street. Her organization has been trying to recruit and support retailers through programs such as Vibrant Spaces because rents are typically too high for mom-and-pop stores. She thought it could be an anchor to attract other retailers.
“I was really, really, really caught off guard because I had not had any indication that this was happening,” she said.
The transition was anything but a solution. Dunmar Exhibit Services, a contractor, sued to get paid for booths, tables, dressing rooms and rope for the January bridal showcase. In the case, emails between Jennifer La Londe, House of Maya’s chief operating officer, and a Dunmar representative showed the distress.
“Thank you very much for working out a payment structure for us,” La Londe wrote on April 28. “As we continue to work out the kinks and growing pains of merging our 6 storefronts, it is greatly appreciated.”
But, according to the correspondence, the payment never came.
“We had the best hopes of doing this in May, but at this time, I need to ask if there is any way we can hold off and you could run the card that was given to you on until June 19th?” La Londe wrote on May 24. “We could do half at that time and then the other half on Monday, July 3rd?”
In June, a Norfolk judge entered a default judgment in favor of the contractor for nearly $6,400, plus interest and fees.
Holihan said the move involved a new phone system, which interfered with customer calls and amped tension with brides. Though that first month in the downtown store was the company’s best March on record, Holihan claims, House of Maya still couldn’t turn the corner. A negative post on Facebook gained traction with dissatisfied customers.
“My phones were ringing off the hook,” Holihan said. “We couldn’t keep up with the volume. It was an immediate P.R. crisis.”
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“I lost everything”
Revenue plummeted, she said, so she tried to raise capital again. By mid-May she couldn’t make payroll.
Melanie Cornelisse, a seamstress who worked contractually with the company, said it became clear the business was in a tailspin. A check she had received in January bounced, and she had not received any compensation for February.
She had an arrangement with Holihan to receive a portion of the alterations fees, Cornelisse said.
When she pressed for her pay, instead of getting a check, Cornelisse said Holihan wired her some of the money.
“One time she just handed me a bunch of money from the till, and that was kind of scary,” she said.
The seamstress sued and won a default judgment of about $6,900 in July, but doesn’t expect to see any of it.
Little by little, Holihan retreated from her community involvement. She resigned from the YWCA South Hampton Roads board in May after not attending meetings for a few months. Previously, she had led an auction fundraiser for the organization called Brides Against Domestic Violence.
Holihan said in June she found some angel investors, who helped fulfill a large amount of gown orders.
She contemplated a Chapter 11 bankruptcy but didn’t have the funds for the legal preparation. There were friends and advisers who peered into her books to find a way out of the red. She even received a short-lived offer to give the majority of her company away with an option to buy it back later.
A lot of ideas fell through while the clock was ticking: The bank had given her a deadline to come up with a plan before a takeover.
Meanwhile, Holihan had drained her savings. At the end of 2015, she stopped taking a paycheck from the business, she said, which meant her two-income household shrank to one. They fell behind on their mortgage.
“I spent 18 months of my life trying to turn over every rock possible to save my company,” she said. “The only peace I have is I literally gave up everything. I lost everything. I put everything on the line.”
Now she’s trying to pick up the pieces. She has finished writing a book for brides on how to get the most out of their dress shopping experience and is seeking representation. She’s talking to a lawyer to help shore up lingering legal issues. A personal bankruptcy filing might be in her future, she said.
With a unanimous vote, the Retail Alliance ousted her from the board last month. Chairman Joseph Taylor said her removal was based on bylaws stipulating board members must operate active retail businesses.
She won’t have anything to do with the new venture her former manager will lead. On Sept. 27, builder Anthony Cataldo bought all of the House of Maya dresses, accessories and furniture at a bank auction for $150,000. Diana Del Corso, who is also Cataldo’s employee, said she will run the new bridal shop under a different name. After liquidating the dresses in a sale, which is expected to continue through Monday, the partners plan to start fresh with new inventory.
Before the auction, Holihan believed some investors might buy the lot and hire her to manage the business.
“There was literally a moment of joy when I found out who the buyers were,” Holihan said, “because I knew it was over for me.”
Never again will she run a bridal salon, she said, but maybe there’s another role for her in the industry. There’s just a lot of emotion riding the gown train.
“If I was a furniture store that went out of business,” she said, “it probably wouldn’t have even made the news.”
