The company had also struggled with the lasting impacts of Covid lockdowns and the recent downturn in the property and construction sector.
But the liquidators said Franklins may yet prove to not be insolvent.
The liquidators’ primary objective is to see if they can achieve a sale of the business and assets of the company as a whole, they said.
If unsuccessful, the company’s assets will be sold through an orderly liquidation sale process. The liquidators had undertaken a stocktake and begun selling products in a reduced form to get the company’s inventory levels down.
The liquidator’s report shows Franklins has total liabilities of more than $31.2 million.
Secured creditors are owed more than $25.8m. These include Westpac NZ, GE Mortgage Management, Fletcher Steel, Fletcher Concrete and Infrastructure and Iplex Pipelines.
Unsecured creditors (trade and other creditors) are owed more than $4.8m. This includes amounts owed to local and overseas suppliers, amounts owed to customers under the company’s customer loyalty scheme programme and provision for employees’ unsecured claims for four weeks payment in lieu of notice.
These include Bunnings, Auckland Council, Aqualine Trading, Fisher & Paykel Appliances, Genesis Energy, Heartland Bank, Nova Energy, New Zealand Couriers, PGG Wrightson, Steel & Tube and Spark.
All staff have reportedly been paid their outstanding wages, however, $358,793 is owed in outstanding holiday pay. The liquidators said outstanding holiday pay will be paid within the first fortnight of the liquidation.
No money is owed to Inland Revenue in respect to PAYE and GST.
A breakdown of Franklins’ assets shows the company is owed over $3.5m under “accounts receivable” – which is goods and services that have been delivered but not yet paid for.
The company has $115,281 in cash at the bank and more than $1.4m in term deposits (rental bonds).
The term deposits are specifically charged by Westpac NZ in respect of rental guarantees provided against certain company premises leases. The liquidators said the value of such rental guarantees is uncertain at this stage.
The value of inventory and fixed assets was withheld by the liquidators to avoid any prejudice during the sales process.
Franklins was founded in 1954 by the late Peter Smith and provided premium bathroom products, imported from Europe.
Companies Register records show Stephen Rex Smith is the sole director.
Stephen Smith was not immediately available for comment.
The company supplied plumbers and builders from a centralised warehouse in East Tamaki after relocating its previous six sites in and around Pukekohe in 2020.
It operated eight plumbing and bathroom branches across the North Island.
Franklins imported 14 exclusive brands from Europe. Those brands included Valdama, Hansa, Bette and Vitra with products such as tapware, basins, baths, showers and toilets.
Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sports. He reports on topics including retail, small business, the workplace and macroeconomics.
