Kitchen Things staff paid as embattled retailer sells down stock

A security guard at a Kitchen Things store in Newmarket, Auckland, on the day the company went into receivership. Photo / Jason Dorday

Out-of-pocket Kitchen Things staff have been paid their wages after the embattled upmarket appliance retail chain collapsed last month.

The Herald reported at the time how staff turned up to work to find they no longer had a job after the company went into voluntary administration and receivership on August 20.

Kitchen Things and its related entities have since gone into liquidation owing creditors more than $16.6 million, according to an administrator’s report.

Stephen Keen of Grant Thornton said recoveries made selling off stock had allowed for the 130 staff to be paid the maximum entitlement of $31,820 per employee before tax and other deductions like KiwiSaver and student loans.

“We’re really pleased with this result,” Keen said.

“Being able to provide the full entitlement to employees isn’t always possible as it depends on the level of recovery appointees can make during the liquidation or receivership process.”

Kitchen Things stores have now closed, while an independent store in Hamilton remains open.

Remaining products are being sold on an auction house site that specialises in selling liquidation stock.

Update on customers

Keen said as with most cases in retail receiverships, customers often find themselves as unsecured creditors where there is no traceable stock or inventory item allocated to their sales order.

“We can understand customers’ frustration with the situation; unfortunately, when a retail business fails and goes into receivership, receivers often face tough challenges around entitlements to the stock held at the time of the appointment.

“The tracing requirements of specific items to customer sales orders is complex and time-consuming, often resulting in issues where the tracing cannot be completed because the product is not held by the company, which means the customer is the one to lose out.”

Keen said under the Companies Act 1993, employees of insolvent businesses are to be prioritised ahead of unsecured creditors.

“Now that we’ve achieved this milestone for Kitchen Things’ employees, our goal is to ensure the best outcome for all stakeholders through the sale of stock and assets.”