Health store chain TravelPharm has been placed into liquidation three months after its Auckland Airport stores closed and the company laid off 100 staff.
Auckland Airport TravelPharm Limited went into liquidation last week following reports of the company being unable to pay former staff who were made redundant.
Tony Maginness and Jared Booth of Baker Tilly Staples Rodway were appointed liquidators for Auckland Airport TravelPharm Limited on October 30.
Maginness said TravelPharm was losing money as a result of a decrease in sales which resulted in the liquidation.
A creditor applied to have the company liquidated.
Maginness said the retail chain, which previously operated 10 stores, sold its Christchurch and Queenstown Airport stores, and Botany showroom and online business, prior to the company being placed into liquidation. Those stores are trading under the same TravelPharm name.
It was too early to tell if the company would be able to pay all of its creditors and determine collectively how much money it owed, he said.
"The liquidators will endeavour to recover as much money as possible for creditors," he said.
Increased competition with other duty-free stores selling the core products sold by TravelPharm - such as Manuka Honey, skincare and health supplements - at Auckland Airport had reduced the company's sales by 50 per cent, he said.
The company had also been affected by reduced Chinese spending and passenger numbers in the past six months, he said.
"Following these events and increased rents, the company underwent a restructure and closed down five stores, laid off a total of 100 staff across the head office, management and retail stores."
In August, TravelPharm closed all three of its Auckland Airport stores, located airside and landside in the international terminal, and in the domestic terminal. At that time, the Herald was told sales staff were given no notice of the store closures, with many turning up to work without realising they had lost their jobs.
TravelPharm director and founder Yoon Song told the Herald this morning that suppliers, some of whom were creditors, stopped supplying the company with stock, which had contributed in the downfall of the TravelPharm business.
He said Auckland Airport's high rent and retail tenant fees were a "major contributor" to the failure of TravelPharm's Auckland Airport stores. "I'm very upset," Song told the Herald. "Unfortunately it comes to this point.
"We tried everything we possibly could to pay back [money owed to] creditors and now we have to go through this process because one of them filed an application for the liquidation, so we have to do this."
TravelPharm had been trading at Auckland Airport for more than 10 years. It opened its flagship airside store in December 2017, along with premium honey speciality store Beecology. It opened its first store at Auckland Airport in 2007.
The business started as coin-operated massage chairs in airports, but two years later TravelPharm was established. As of December 2017, the pharmacy chain employed more than 170 people and in the past decade the group's turnover had grown from $1 million to $37m.
Song told the Herald he was $250,000 out of pocket following the closure and subsequent liquidation of the Auckland Airport business.
TravelPharm had invested more than $10m of profit back into the business over the past 12 years, he said.
"Whatever we made from TravelPharm we invested it in the business, that's why we had a big loss."
The supplement retailer had 10 stores throughout Auckland, Christchurch and Queenstown at the end of 2017, and at that time, Song said, he had plans to open "dozens of New Zealand concept stores" in Korea, Japan and China.
Song said he would now focus his efforts on his product development and export company NatOrg International. "[NatOrg] focuses on product development, R&D; an online-export concept, so I will re-focus my energy into that business.
"We want to re-group and restructure and focus on what we are strong at. We might focus on online and export businesses."