Shanton in voluntary administration

FILE

The Shanton chain of women's clothing stores has gone into voluntary administration just over two years after it was bought out of receivership.

Shanton has two stores in Rotorua - one in Central Mall and one on Fenton St - and one in Whakatane.

The administrator, Bryan Williams, said the 240 staff at the 37 Shanton stores across the country would continue to get paid, but that further investigations were needed before a call was made about restructuring.

The businesses will continue to trade normally, though Mr Williams said gift vouchers and lay-by purchases will need to be dealt with through his office.

Voluntary administration, according to Mr Williams, allows the possibility for "a workout from difficult economic circumstances".

"Liquidation is terminal in the company's life, whereas VA [voluntary administration] offers hope of commercial revival brought about through the skills of the administrator to focus and harmonise all the resources of the company into a recovery plan."

The directors of the chain's owner, Shanton Fashions, appointed Mr Williams after the company's credit facilities were withdrawn and demands made for repayment of the overdrawn balance.

"Despite the company having its liquidity greatly reduced, the directors are still of the view that the business can continue and the brand survive. They are highly motivated to achieve this outcome, which is why they have elected voluntary administration," Mr Williams said.

It is not yet known how much the company owes creditors, but this is likely to be discovered this week.

Shanton Fashions purchased the chain as a going concern from the receivers of its previous owners in December 2012.

That company, Shanton Retail, eventually repaid the $600,000 owed to its employees and Inland Revenue. Receivers reached a deal with trade creditors owed $1.6 million.

Those owed less than $500 received all their money back, while those owed more than $1000 got back 10 per cent.