Top Retail, which operated the local Top Shop and Topman stores, was in negative equity after generating $4.1 million of losses in its three-year life in New Zealand.
The first receivers' report by McGrathNichol's Conor McElhinney and Kare Johnstone show the retailer in negative equity of $2.9 million as at Sept. 7, the date of receivership, after accumulated losses since its launch in 2014 outstripped the $1.3 million of shareholder funds. The shareholders of the retailer included interests associated with Kiwi clothing firm Barkers, Christchurch property investor Philip Carter and fashion designer Karen Walker and also extended loans totalling $6.1 million to Top Retail.
The company's stores on the high streets of Auckland and Wellington were closed in September after the receivers failed to find a buyer, leaving net debt owed to the appointing lender of $2 million, the shareholder loans and some $1.8 million to trade creditors.
The receivership was the latest in a line of retailers struggling to make a traditional bricks-and-mortar model work when online rivals avoid the overhead of a high street site and are accused of skirting customs duties that traditional vendors face.
Top Retail's assets were valued at $8.1 million, of which $5.9 million was in furniture and fittings. The company had inventories totalling $787,000 at the time of receivership, and managed to sell all stock before the stores were closed, the receivers said.
Staff were owed $95,000 of unpaid wages and holiday pay when the receivers were appointed, and Inland Revenue Department was owed $55,000 of outstanding income tax and a further $1,400 in GST.
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