Line 7 tie-up in the balance

Ross Munro, chief executive of Line 7 clothing company also has a shareholding in Canterbury of New Zealand. Photo / Brett Phibbs

The future of Line 7's association with fellow sports-gear maker Canterbury hangs in the balance as receivers step in to administer the brand famed for its quality outdoor clothing.

Line 7 went into receivership on Monday, leaving the fate of the company's 110 staff, 11 retail outlets and warehouse and distribution facilities up in the air. Buyers are being sought for all or part of the business.

The well-known Kiwi company has a number of high-profile licences to produce clothing for sports organisations, including a deal to make Rugby World Cup 2011 merchandise.

This arrangement was through Canterbury. Line 7 owner and director Ross Munro has a shareholding in the international company's local subsidiary, Canterbury of New Zealand, and has been running the Australasian business for several years.

Munro said Canterbury International had been informed of Line 7's situation, and he would be talking to its overseas-based executives overnight about "shareholding issues".

Munro said the Line 7 receivership did not impact on the operations of Canterbury, which were separate.

Canterbury was in "relatively good heart" in Australasia. "We've got rid of a lot of poorly performing contracts, we've picked up things like the Warriors and New Zealand Cricket."

In terms of the Rugby World Cup deal, Canterbury would be the lead brand, with Line 7 now not having a part, he said.

Munro said the future of the company's employees depended on whether a buyer could be found.

Line 7 receiver Grant Graham said he had already had a series of parties contact him.

The plan was to reopen the stores tomorrow and trade through all the stock.

In a statement, Emirates Team New Zealand said Line 7 was one of six companies which supplied it with goods and services on an exclusive basis.

"We valued ... . the friendship and advice we received from Ross Munro and his team."

It would take a few days to examine the options before deciding on a course of action.

The collapse of Line 7 became the subject of political debate yesterday.

The Labour Party accused the National Government of not doing enough to ward off the effects of the recession.

"The only thing you can blame the Government for is the lack of real response overall to stimulating the economy through the tax cuts that they could have done and the learning and earning approach to skills and training," Labour leader Phil Goff said.

Finance Minister Bill English said the Government had a programme to create the right environment for businesses while investing in infrastructure.

Prime Minister John Key said companies should sort out their own problems. "[Line 7 ] is ... an important brand and it's well recognised by New Zealanders but, at the end of the day, our preference has been to find commercial solutions to commercial problems."