Footwear outlets remain in the family after sale by receivers
"We need the diversity of retail, it's important we have heritage stores like Banks." First Retail managing director Chris Wilkinson
Footwear retailer Banks Group has been sold by receivers.
Banks Group, which includes Banks Shoes, Shoe Connection, SNKR, and Plimmer Shoes went into receivership on May 26 at the request of its director.
PWC receiver John Fisk said the stores were sold to a group of investors led by Jeremy Bank, the son of former director John Bank.
Receivers PWC said in their first report yesterday that the company’s rapid expansion was ultimately its downfall. Selling the company would provide the greatest return to creditors.
The sale included five stores, plus an online store. Eight other stores were closed.
Four stores were closed immediately after the company was placed in receivership.
Out of 170 staff, 141 have been paid a total of $339,000 in holiday pay and wages, and 63 staff were offered jobs by the new owners.
The sale is expected to pay out all preferential creditors, including Bank of New Zealand that is owed $1.6 million.
The failure of Banks Shoes’ expansion is part of a broader trend of New Zealanders spending less on shoes.
Figures from Marketview show in-store footwear spending fell 0.5 per cent and shoe sales dropped 6.4 per cent in the year to April.
Marketview spokeswoman Madeleine Boles de Boer said the number of sales falling faster than spending was due to consumers visiting stores less, but they bought more expensive shoes when they did.
‘‘The average transaction may be going up slightly, but people are spending at footwear stores less,’’ she said.
Online footwear spending for New Zealand stores is also on a downward trend. Domestic online spending in 2015 was up almost 16 per cent, but was up just 4.8 per cent this year.
On the other hand, international online spending jumped 26.8 per cent this year, more than double the growth two years ago.
Boles de Boer said online spending was driven by convenience, range, and price.
‘‘[New Zealand] retailers are having to focus a lot more on the in-store experience, like exceptional customer service and interesting fit outs,’’ she said.
‘‘Everyone is competing for less consumer spending, and Banks being sold just goes to show that even the best operators are not immune to the current conditions.’’
First Retail managing director Chris Wilkinson said it was good Banks sold so it could continue as a brand.
‘‘We need the diversity of retail, it’s important we have heritage stores like Banks.
‘‘They had a successful online presence and the remaining stores will leverage that connection.
‘‘But it’s a very competitive market. Things in retail can change on a dime.
Wellington Gubbs Shoes owner Julie Gubb was not surprised Banks was struggling.
‘‘I’ve seen them grow from one shop to what they have now,’’ she said. ‘‘[Banks] should have stopped and thought about it.
‘‘You can’t offer great service and keep your finger on the pulse when you’ve got that many stores and that’s exactly what’s happened.
‘‘I don’t feel good about being right but that’s what I thought would happen.’’
Stores that remain open are all in the Wellington region including Shoe Connection, Lambton Quay, Queensgate, The Plaza Palmerston North and online, and Banks Shoes Manners Street and Lower Hutt.