Retail chain troubles bear anxious wait

Thirteen jobs and two Palmerston North stores are on shaky ground as two national retail chains face financial woes.

Hundreds of jobs across the country hang in the balance after PK Furniture went into receivership earlier this month, followed by Shoe Connection’s parent company, the Banks Group, on Friday.

The Banks Group receivers, PWC partners John Fisk and David Bridgman, immediately closed two Auckland Shoe Connection Stores but the fate of the Palmerston North store, and its nine staff, was still up in the air.

Fisk said he would know which of the remaining 12 Banks Group stores would close over the next week.

PK Furniture receiver Andrew Mckay has kept all 16 stores trading so far, including the Featherston St store in Palmerston North with its four staff.

The Shoe Connection in The Plaza shopping centre would stay open for at least the next week, and would continue to honour gift vouchers and the company loyalty programme’s rewards, Fisk said.

Fisk and Bridgman met with the chain’s management on Monday, and have begun a review of the finances of each store to see which could be kept open.

A decision was expected by the end of the week, at which point the shoes from the shuttered shops would be divided up between the remaining stores.

The PK Furniture receivership has sparked anxiety among customers unsure if they’ll ever see their order delivered, but the chain’s landlords have also faced uncertainty.

Mckay said arrangements around rent would be made with the landlords of each outlet, but he couldn’t comment on the Palmerston North store specifically, due to commercial sensitivity.

In the Featherston St store’s case, the landlord was the Palmerston North Maori Reserve Trust.

Under the Receiverships Act 1993, the receiver became personally responsible for the rent and other lease payments for the PK Furniture stores 14 days after being appointed.

The receiver will remain responsible for payments until the furniture store moves out or the receivership ends, whichever happened first. The trust can claim any back rent owed from before the receiver took the reins as an unsecured creditor in the company’s liquidation.

Reserve Trust business manager Keith Hindle said the trust had not been told when, or if, PK Furniture would end its tenancy.

The trust had not looked into a replacement tenant, and its lawyers were in touch with Mckay to organise rental payments, he said.

The receivers were in the process of assessing the PK Furniture’s stock levels, so the Featherston St store would largely be limited to furniture it already had in stock.

Mckay said if a larger order was made, or if there were enough smaller orders at Palmerston North and nearby stores, more furniture could be brought in.

Mckay said there was a significant number of customers left with outstanding orders, and they would be worked through on a case-by-case basis.

Customers with outstanding orders, from before the receivership started, were asked to fill out a form on the PK Furniture website to register as unsecured creditors.

Consumer NZ advised customers to make a claim straight away to ensure they would be in the queue for compensation.