The two companies have both gone into liquidation. Photo / NZME
For years, the only similarity between two well-known Hawke’s Bay companies was their name.
But now a local electrical firm and a menswear retailer – both bearing the name Alexander – have entered liquidation at the same time, both owing hundreds of thousands of dollars.
Alexander Electric Ltd based in Napier, is in liquidation owing over $1 million, mainly to the Inaland Revenue Department (IRD) for unpaid taxes and penalties.
Meanwhile, menswear company Alexanders Apparel Ltd, which had two stores in Napier and Havelock North, is in liquidation, owing over $600,000.
Despite the similar names, they are separately owned and are in no way related.
Both companies have cited the hangover of Covid and an economic downturn as factors for going bust.
One of the owners has also taken aim at the IRD over what he claims are excessive tax penalties. The liquidator has not accepted that claim.
Alexanders Apparel Ltd was nearing its 50th anniversary when it went into voluntary liquidation on September 1.
Its long-standing store in Napier, Alexanders on Tennyson, has shut its doors.
However, its second store, Alexanders Havelock North, remains open and is selling down stock at a reduced price to assist the liquidation process.
Its online store is also continuing for now, with plenty of stock available at a reduced price.
Another store in Hastings called Alexander’s Apparel has nothing to do with the liquidation and that store is separately owned.
Hawke’s Bay Today contacted the family-owned menswear retailer and was directed to the liquidator.
Liquidator Larissa Logan said the physical store in Havelock North would remain open for as long as it took to sell down the inventory.
The company’s balance sheet indicates liabilities of about $691,000, although that figure could change as creditor claims are received, she confirmed.
A liquidator’s report is being released soon with a call for claims.
“It is too early to definitively state what led to the liquidation,” Logan said.
“However, it’s clear that challenging economic conditions – including the impacts of Covid-19, Cyclone Gabrielle and the current recession – have contributed to poor trading performance."
The company’s business assets are also up for sale, such as the intellectual property and website.
Alexanders Apparel Ltd is owned by Gregor Bell and was established in Hawke’s Bay in 1976 by Graham Alexander Bell.
Meanwhile, Alexander Electric Ltd has been trading since 2011 and has been involved in significant projects across Hawke’s Bay and New Zealand.
The electrical firm operated out of a leased property in Napier’s industrial area of Onekawa.
The company went into liquidation in late July, following an application by the IRD, a creditor, in the Napier High Court.
The first liquidator’s report says the company owes over $1.1m, mainly to the IRD.
Alexander Electric owner Mark Alexander claimed the company only owed a portion of that in unpaid taxes, about $280,000, and the rest was penalties and interest.
Alexander claimed that, apart from the IRD, his employees and other creditors had been paid.
He said the company’s seven staff (including himself) had moved across to another one of his existing companies, AEL Hawke’s Bay – essentially continuing the electrical business under that different company name.
He said AEL Hawke’s Bay had even purchased stock and equipment from the liquidated company at market value.
Alexander said he planned to remain at the same premises and move the lease to AEL Hawke’s Bay.
As for getting behind on taxes, he said a major factor was the fallout from Covid.
“We do a lot of hotels around the country and the price of one hotel was done in 2019 and the price of another one was done in 2021, and we didn’t complete [them] until mid-last year,” he said, of projects with set pricing.
“You look at the pricing that we did for it, compared to when we completed it, and the prices of all the parts and equipment and even labour had gone up significantly.
“So, jobs you are planning on making good money on, you came out just breaking even.”
He also cited a downturn in the economy.
Alexander claimed the tax penalties and interest charged by the IRD were excessive and he had tried to make an arrangement with them.
The Ministry of Business, Innovation and Employment’s (MBIE) Insolvency and Trustee Service is leading the liquidation.
Insolvency and Trustee Service regional manager Kelly Serrant refuted the claim that most of the money owed to the IRD was tax penalties.
“Inland Revenue have filed a preferential claim totalling $649,028.20 for GST and PAYE deductions,” Serrant said.
“Interest and penalties are not classed as preferential and are included in a separate claim.”
There are laws against setting up similar companies, known as phoenix companies, once a company has gone into liquidation.
Serrant said, as part of the liquidation process, the liquidator would investigate whether there had been any breach of the Companies Act 1993.
However, as AEL Hawke’s Bay was an existing company at the time of the liquidation, Alexander was of the understanding he was doing everything legally and had not breached any laws.
Gary Hamilton-Irvine is a Hawke’s Bay-based reporter who covers a range of news topics including business, councils, breaking news and cyclone recovery. He formerly worked at News Corp Australia.