EziBuy creditors named, claim $117m: first liquidators’ report out

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

Creditors of national clothing and homeware retailer EziBuy have claimed $117 million, including redundancy owed to staff, rent to NZX-listed landlords, money to Inland Revenue and many other businesses here and overseas.

Whether any money will be available to customers or those claiming funds depends on how the liquidators go selling the EziBuy group of businesses.

Total estimated claims against the insolvent New Zealand-registered businesses total $117,953,604, according to Sydney-based liquidators from Olvera Advisors, Damien Hodgkinson and Katherine Barnet.

“Based on the information presently available to us, it is unlikely that a dividend will be paid to any class of unsecured creditor,” the liquidators said in a report posted overnight.

“The ability to pay a dividend to unsecured creditors is reliant on the extent of recoveries from the sale of any remaining inventory/held stock, any potential voidable transaction claims and debt recoveries. We will provide creditors with an update in this regard,” the liquidators’ report added.

The business will continue to trade during the liquidation to try to sell as much stock as possible, the liquidators said.

EziBuy sells clothing for men, women and children, and homeware goods from a chain of national stores and had a big online presence, importing most of its stock and printing catalogues.

But this month creditors voted for liquidation after administrators recommended that during a watershed meeting at Russell McVeagh’s offices in the Vero Centre on July 19.

New Ezibuy, Ezibuy Custodian, Ezibuy Holdings, Ezibuy, Last Stop Shop, Ezibuy Operations and Sara Apparel are all in liquidation and considered part of the group of connected entities. These are all NZ-registered companies.

The initial report showed unsecured creditors, staff redundancy pay, long-service leave and holiday pay are part of the $117m owed.

A list of creditors naming all the staff appears in the liquidators’ report.

Preferential claims of $2.4m include $1.8m priority employee entitlements owed by EziBuy in annual leave and redundancy to staff.

An amount of $560,000 in unpaid customs duty is owed to the NZ Customs Service along with loans from the Commonwealth Bank of Australia.

The estimated realisation of inventory or stock held by the business has been withheld “so as not to prejudice the sale process”, the liquidators said. Nor is any number put on the value of property plant, equipment or intangible assets for the same reasons.

Sylvia Park landlord Kiwi Property Group was named in the list of creditors because EziBuy traded from a shop there, along with fellow list landlord Stride Property, via its Fabric Property.

The report said more than $500,000 was owed in unpaid customs duty. Photo / Getty Images

Many garment manufacturers, suppliers and distributors are claiming money, along with national New Zealand-owned businesses and utilities.

Inland Revenue, Meridian Energy, Mainfreight, Google New Zealand, Facebook Ireland, and Envirowaste Services are claiming money, along with Crown Equipment, First Security Guard Service, Hera Sweaters, Global Foodcare, Finebags, Just Water, Office Max, the Palmerston North City Council, Reach Media, Retail Solutions, Rentokil, Skynet, and Tauranga Crossing.

Waste Management, Windcave, Sultana Sweaters, Ricoh New Zealand, Paramount Packaging, Palmy Properties, NRN Knitting & Garments, Ngāi Tahu Property, New Zealand Post, Manawatu Security Fencing, Liyang Zhong Fang Lian Knitwear, Jianghua May F.M. Garment Co in Sydney, Intercity Traders in India, Intelligent Reach in Australia, Ideal air Conditioning and Hi-Tech Packaging were also among the creditors named.

On the plus side, assets of the business include $2.8m recoveries from inventory sold under license and $353,442 cash in the bank.

But amounts claimed far outstrip those amounts.

Secured creditors alone want $72m, according to a statement of financial position and unsecured creditors a further $43m.

Under the sale of the business, the report said the liquidators will finalise the preparation of the business and liaise with any interested parties.

The liquidators have previously said the group’s insolvency was due to falling sales, constricted working capital and a general tightening of the New Zealand economy post-Christmas.

“The decline in sales driven by both internal management decisions and general market trading factors meant that the distribution and head office overheads to operate the reduced sales level was significantly higher than required,” they said.

The company was also carrying “significant costs” from its former head office lease in Auckland, which it left in March last year but couldn’t find an alternative tenant for.

As at the start of April, it owed around $48m to the Commonwealth Bank of Australia, $16.3m to Melbourne Securities Corporation and A$7m to Mosaic – they were considered secured creditors.

Colin Theyers of Auckland is listed as a director of many of the businesses with Palmerston North-registered offices. The sole shareholder is listed as Ezibuy Holdings of Palmerston North which is owned by Australia’s Mosaic Brands, listed as the ultimate holding company.

EziBuy received $2.2m in Covid cash from Work and Income during the pandemic. It listed 354 paid employees in this country and got that money to keep paying them during lockdowns when it couldn’t trade.

Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.