A receiver of New Zealand's biggest homeware store has revealed how hard her firm tried to sell the business as a going concern, including approaching more than 50 would-be buyers.
But in the end, attempts to sell the 100-showroom Nido came to nothing and yesterday it was announced that all stock in Henderson's store would be sold in the next two to three weeks and the shop shut.
Kare Johnstone of McGrathNicoll said her practice had approached more than 50 parties in a last-ditch attempt to sell the business, whose name is Italian for nest.
But in the end, no deals were signed, spelling an end to Fijian migrant Vinod Kumar's dreams of an Ikea-style homegrown operation in New Zealand to mirror the success he enjoyed owning MEGA Mitre 10 stores.
Johnstone rejected the idea that the receivers dealt directly with global Scandinavian chain Ikea which announced two years ago it would open in Auckland but which is yet to go a step further and name where or when.
Although she did not name them, Johnstone indicated discussions with any business like Ikea would need to be between the property owners and that international retailer.
She emphasised that it was not the place of the receivers.
On December 4, Johnstone and Conor McElhinney were appointed to Magsons Hardware which trades as Nido, the giant Henderson store that opened on June 1 with 100 showrooms and a 2.7ha footprint, offering everything from artificial flowers to couches.
Negotiations were held with others who would continue retailing activities on the site.
"As receivers of Magsons Hardware - the trading entity of Nido - we were only the tenant of the property and not the landlord, which is a separate legal entity. There is a separate process being undertaken by the property owner to identify potential new tenants," Johnstone said when asked about Ikea.
She stressed the lengths the McGrathNicoll staff had gone to attempt to secure a new retailer taking over - both new to the New Zealand market and already established here.
"The receivers approached more than 50 potentially interested parties and discussions were held with a smaller number interested in acquiring the business as a going concern," she said.
Asked what types of businesses those 50-plus were, she said all negotiations were subject to confidentiality agreements, "however, we can say that there was a range of interested parties from competitors to new entrants.
"Indicative offers were received for the business and assets and bulk stock. However, ultimately a sale was unable to be achieved. Due to confidentiality, we cannot disclose the sale prices discussed."
Now, a question hangs over the $62m property investment scheme which owns the land and Nido building and which was being paid rent when Nido traded.
Albany financial specialist Maat offered shares in a company, Central Park Property Investment, which raised the $62m to buy the land and building from Nido founder Vinod Kumar. Maat forecast paying investors 8.5 per cent and that offer stated: "The currently proposed lease terms are an initial term of 15 years with two rights of renewal
each for 10 years".
Maat managing director Neil Tuffin and investment relations manager Jodi Tuffin called for expressions of interest in Central Park Property Investment.
"This retail store will provide an integrated offering of products, services, and customer support. The concept is modelled on similar well-established stores overseas but will have its own uniqueness and be privately owned," the Tuffins' offer said.
Jarden's Pearlfisher is the first mortgagee and is due a loan repayment this month. Investors include retired farmers, two of whom put in $1m each. They expressed concern about that last year but said they had been getting monthly payments of around $5000 when all was going well.
Asked what would happen to those investors who own the property when Magsons stops paying rent, Johnstone said: "Magsons Hardware, as the tenant of the property, does not have any direct contact with the investors of the property. The implications of this will be managed by the property owner."
Asked what Magsons paid Central Park investment in monthly rent, she said: "We do not propose to provide this information at this stage due to confidentiality. The next statutory report is due in August 2021, which will include a schedule of receipts and payments."
Asked how much stock was sold since McGrathNicoll took over in December, she said: "Information regarding sales will be included in the next statutory report. However, significant stock on hand remains across a wide range of product categories: bedroom furniture, dining tables, chairs, sofa beds, consoles, homeware, etc."
Asked what would happen to the 60 Nido employees, Johnstone said they had been very hardworking and committed throughout the receivership and she praised them.
"A lot of work has been done, while Nido continued to trade, in order to try and achieve a sale of the business as a going concern, which would have assisted with a transfer of staff, but unfortunately [this] was unable to be achieved. This is a difficult time for employees and we are grateful for their assistance during the receivership," she said.
Asked about bonuses paid to sales staff during the receivership for achieving certain targets, she said she could not devolve personal employee details.
Nido is on target to shut either early or mid-March.