Support for Bennett & Bain

By Karyn Scherer

Lingerie manufacturers in New Zealand and Australia are keen to see the struggling Bennett & Bain chain survive, despite some having to wear losses from its second receivership in a decade.

After months of financial problems and difficulties getting stock, the old family firm finally told its bankers to call in the receivers last week. The move came almost exactly ten years after its previous incarnation also had to admit financial defeat in the wake of the stockmarket crash.

However, suppliers to the chain say they are encouraged by their discussions with receivers PricewaterhouseCoopers, and will continue to back the company.

So far, three of the chain's 14 stores - Glenfield in Auckland, Dunedin and Christchurch - have been closed, and another is likely to close soon. But receiver David Davidson is confident the remaining 10 stores will survive.

The company is believed to owe nearly $2 million. Although some suppliers are unhappy about the receivership, many had already stopped dealing with the company several months ago. Some were so badly burned last time, they refused to deal with the company again.

New Zealand's largest lingerie manufacturer, Bendon, only recently resumed dealing with the chain, but managing director Hugo Venter denied it had got the pip after its previous experience.

"For reasons best known to Donald Bain, they decided not to continue business with Bendon, so we didn't deal with them for a relatively long period. At the end of last year, we contacted him and suggested it was appropriate for us to have another look at it," he said.

By April, however, Bendon could see the writing on the wall and it refused to give the chain any more stock. In keeping with its upmarket image, the only Bendon range Bennett & Bain would allow in its stores was the Elle Macpherson range, but Mr Venter admitted the company would like to sell it more.

"We would love for them to survive and be an additional customer. I think it would be a very sad day for New Zealand retail if that disappears off the map completely."

Bennett & Bain is the second-largest customer of the New Zealand arm of Triumph International. General manager David Smith said the company was convinced the chain had a strong future, now that the poorly performing stores had been closed.

Despite an explosion in the number of lingerie brands now available in New Zealand - around half a dozen new brands have been introduced over the last year - he believed there was still room for a chain at the premium end of the market.

"Our industry is very thin on the ground in the numbers game. If you take out Farmers and the department stores, there's not a lot of good specialist stores ... I believe it's quite possible they could survive, with the help of people like ourselves."

The general manager of Holeproof, Greg Healey, agreed. Mr Healey said the company was keen to resume supplying Bennett & Bain with its Berlei brand.

"It's unfortunate that a retailer of that ilk has ended up that way because consumers need that choice, and manufacturers need those outlets. You don't want to see markets shrinking, you want to see them growing, so in that sense it's obviously another sad moment in New Zealand retailing."

The company's major shareholder and long-time boss, Donald Bain, refused to talk to the Business Herald about the business. But Mr Davidson confirmed it was possible it would be sold.

Mr Davidson said he had received several expressions of interest in the business, both from New Zealand and overseas. However, it was likely to be several more weeks before he was ready to begin negotiations.

He said the company's problems were largely due to too many expensive fit-outs and new store openings in a short period of time. Over the past three years, around five new stores had opened.

The company's cashflow had been squeezed, and it was therefore late in paying suppliers. When suppliers stop delivering stock, its problems compounded, and high rentals in a few locations didn't help.

However, he was confident the chain would survive, given that suppliers had been "extremely supportive".