Receivers take over Zaggers

A high-profile Tauranga cafe business has been placed in receivership just months after opening a new conference facility on The Strand.

Zaggers has operated a popular cafe on Chapel St since 2007 and in December last year opened another cafe (Zaggers 2) with a big upstairs function centre capable of hosting 150 people.

Zaggers 2 developer and landlord Redline Holdings placed the entire Zaggers business in receivership last week.

Redline director Terry Scott would not comment on why he called in the receiver.

Tauranga couple Eddie and Wendy Treacey own the business and Mrs Treacey told the Bay of Plenty Times she was "extremely upset" about the situation and planned to contest the appointment of the receiver through her lawyer.

"We believe the receivership is not valid," she said.

Mrs Treacey acknowledged business had been slow at Zaggers 2 this year and said the low numbers of customers had made it difficult for her new cafe to get established.

Receiver Kim Thompson was appointed last Thursday and while he would not comment on the circumstances that led to Zaggers being placed in receivership, he said he was looking at selling both cafes.

Potential buyers had already shown interest in the Zaggers cafes, which were in high-profile locations, he said.

In the meantime, existing staff would continue running the cafes, and changes, including closing Zaggers 2 on Mondays, would make the business more profitable, Mr Thompson said.

Bar owners along The Strand told the Bay of Plenty Times in February that business over the summer had been notably quieter than in other years.

The Steakout Restaurant, Grumpy Mole Saloon, the Empire Nightclub and Route 67 on Harrington St had all closed in February.

Steakout owner Colin Milne, who also owns the Crown and Badger, said the business had been unable to attract sufficient numbers of week-day diners and had not been sustainable.

Empire Nightclub and Route 67 owner Glenn Meikle said compliance and regulatory hurdles had combined with declining numbers of patrons and turnover to torpedo his plans for a super-club in the city.

Hospitality NZ regional manager Alan Sciascia said recent months had been difficult for the hospitality industry in Tauranga, "but no more than it has been for the last year or two".

"Generally in this industry it's in a hold pattern. If the owners are making a healthy living they are ahead of the pack, as most are break-even businesses."