Bobux receivership: BNZ claims $4.1m, IRD claims $259k after sale to Munro Footwear Group

Bobux co-founder Chris Bennett at a Bobux factory. Photo / Steven McNicholl

Children’s shoewear brand Bobux’s first receivership report shows the Bank of New Zealand (BNZ) is owed more than $4 million by the company.

Bobux went into receivership on April 11 with BNZ appointing McGrathNicol partners Conor McElhinney and Andrew John Grenfell on April 12.

Grenfell said the BNZ debt will reduce, however, with proceeds following “the realisation of the business and assets”.

McElhinney and Grenfell released the company’s first liquidation report last week, stating that $4.1m is owed to BNZ as the company’s general security holder.

IRD is claiming $113,000 in unpaid wages and entitlements for employees, $41,000 in outstanding GST and $105,000 in PAYE; however, the receivers said IRD and employee claims “are yet to be verified”.

Bobux was sold to Munro Footwear Group (MFG) on May 10. The sale price was not disclosed.

Grenfell told the Herald: “A small number of staff were made redundant, however the majority were offered employment with Munro Group.”

The receivers’ report said McElhinney and Grenfell “engaged with over 70 interested parties, with over 30 signing confidentiality agreements and participating in accelerated due diligence” before the sale.

“It was necessary to run an accelerated sale process to preserve the value of the business. Factories had to stop production as the receivers could not guarantee payment,” McElhinney and Grenfell said.

They added: “Delaying a sale would have meant the next season of product would be delivered too late and the future season would not be sold, irreparably damaging the business.

“Consequently, the receivers engaged with parties who could act quickly, required limited due diligence, and had funds readily available for settlement.”

The receivers stated that Bobux was started over 30 years ago by Colleen and Chris Bennett, providing children’s footwear in over 40 countries.

The company operated as a retail footwear wholesaler and direct-to-consumer business through its websites.

“Unfortunately, the business suffered significant supply chain disruptions from Covid-19 that resulted in over-stocking to combat delays, as well as an IT system overhaul that went significantly over budget and time,” the report said.

McElhinney and Grenfell also said Bobux faced a slowing economy with record low consumer confidence in the United Kingdom, Australia, Europe and New Zealand.

“As a result of these pressures, the business was unable to secure ongoing funding for losses and consequently requested that the group be placed into receivership,” the receivers reported.

It’s not the first time Munro has bought financially troubled businesses.

Australian-owned footwear group MFG acquired Ziera Shoes, formerly known as Kumfs, in 2018.

Ziera was placed in liquidation following the sale of the intellectual property of the brand for $800,000.

Kumfs Group owed creditors $30m, while the Australian business, Ziera Retail, was placed into voluntary administration in September 2019.

Ziera Shoes became insolvent after it suffered from falling sales in retail stores, decreased orders from wholesale customers from a lack of independent footwear retailers, and changes to the supply chain, causing delays to deliveries, “quality issues” and higher manufacturing costs.

Munro Footwear Group declined to speak to the Herald about the Bobux acquisition.

Alka Prasad is an Auckland-based junior business reporter covering small business and retail. She joined the Herald in 2022 after graduating from the Te Rito cadetship programme.