Ezibuy tumbles to big financial loss, union fears for jobs

The Ezibuy Distribution Centre in Palmerston North. Photo / NZPA / Ross Setford

Jobs could be at risk at fashion retailer Ezibuy, according to a union organiser, but the company itself is refusing to comment.

The business has struggled financially in recent years after Woolworths sold it in 2017, just four years after acquiring it for $350 million.

Ezibuy is now 49.9 per cent owned by Sydney investment firm Alceon Group with ASX-listed Mosiac Brands owning the other 50.1 per cent of the shares.

The most recent accounts posted to the New Zealand Companies Office show Ezibuy recorded a $28.9 million loss for the year to June 2020 with revenue falling to $129.3m from the previous year's $152.7m.

The company, whose head office is still based in Palmerston North, booked a $10.5m loss in 2019.

In its audit report EY noted a material uncertainty casting doubt on the group's ability to continue as a going concern. This related to Ezibuy's total liabilities exceeding its total assets by $13.4m.

The accounts show total liabilities increased from $48.4m to $67.13m in 2020.

E tū organiser Ruth Sproston told the Herald jobs were at risk as Ezibuy looked to cut costs.

"We can confirm that a proposal has been put to some employees at EziBuy, and they'll now be going through a period of consultation," Sproston said.

A non-union source told the Herald up to 60 jobs were at risk.

Approached for comment, an Ezibuy representative referred the Herald to the company's Australian owners. However, a spokesperson for Mosaic declined to comment, directing the Herald back to Ezibuy in New Zealand.

A note in Ezibuy's financial statements highlighted some strategies the firm had put in place to try to improve profitability.

These included head office, contact centre, distribution centre and store team restructure.

Ezibuy has five stores in New Zealand but is well known as an online catalogue business.

The company was founded in 1978 by Peter and Gerald Gillespie as a small mail order business in Palmerston North, but grew to be the largest multi-channel retailer in Australasia.

Some of EziBuy's women's fashion collection includes labels such as Capture, Emerge and Grace Hill, along with the UK fashion label NEXT and exclusive European Collections.

Mosaic Brands bought its interest in Ezibuy for just $1, with an option to buy the remaining shares by the end of 2020 for $11 million.