‘Perfect storm’ hits Andrea Moore
Iconic Kiwi fashion brand Andrea Moore has gone into liquidation after nearly 20 years in business.
The label’s managing director, Brian Molloy, said ‘‘highly damaging’’ late deliveries, crippling creditor payment defaults and extensive roadworks outside both its Auckland and Christchurch stores constrained trade for months.
The company hit a ‘‘perfect storm’’ in 2017, Molloy said yesterday.
‘‘Though we have a loyal customer base of over 30,000 our problems will be familiar to anyone conversant with the hugely capital-intensive nature of the industry which has become very discount-driven affecting valuable margins.‘‘
Andrea Moore has seven stores across Auckland, Wellington and Christchurch and employs 22 staff.
Molloy said mis-steps in part of the brand’s strategies of undercapitalised bricks and mortar store expansion also contributed to the outcome of the company.
Both liquidators and receivers were appointed on Monday.
The main reason of liquidation is to collect the assets of the company to distribute to all creditors (including employees, secured creditors and IRD), while receivership is when assets are realised for the benefit of one secured creditor.
Receiver Andrew Grenfell of McGrathNicol said stores would continue to trade while they worked with the directors to assess options for the company. They hope to sell the company. Retail NZ’s Greg Harford said the retail sector was ‘‘very competitive’’, meaning fashion retailers were operating in a ‘‘particularly difficult space’’.
Kiwi consumers were increasingly willing to buy fashion over the internet, and those foreign firms selling over the internet to New Zealanders had substantial advantages, Harford said.
‘‘[They have] greater scale, but also they don’t have to pay 15 per cent GST and 10 per cent duty to the New Zealand Government,’’ he said.
‘‘The reality is that any New Zealand fashion business has a big disadvantage purely because of Government tax policy.’’
Since starting the business in 1999, Moore and Molloy have navigated the ups and the downs of building a fashion brand in New Zealand, operating seven stores and closing some too.
Moore is the creative side of the brand, while Molloy handles the business side.
The business survived the global financial crisis and the Christchurch earthquakes, where it lost a shop on High St, but still managed to keep all staff employed in its Merivale shop.
In 2016, the label started a mass market clothing line for Farmers and also launched a crowdfunding campaign on Snowball Effect with partner Molloy to raise up to $75,000 to develop the label.
Molloy said then that $500,000 would provide a jumpstart for the business, with plans to employ more staff, open another shop in New Zealand, and begin talks with Australian department stores.
In 2017 the company launched its first swim/fit line and opened new stores in Wellington’s Victoria St and David Jones.
In the past year, five high-street fashion brands have collapsed in New Zealand: Kimberleys, Topshop, Topman, David Lawrence, and Marcs.