Street Legal Shoes Limited has operated four retail stores in Christchurch, as well as Rangiora and Dunedin, and an online site since starting the footwear business in 2004.
After efforts to continue were unsuccessful, shareholders Hamish Mcdonnell, Jeremy Mcdonnell and Rachael Wyllie put the company into voluntary liquidation on October 21.
Ashton Wheelans accountant Andrew Oorschot was appointed liquidator and released his first liquidation report on October 29.
Staff were found to be out of pocket by more than $19,000 in wages and holiday pay. Unpaid debts to unsecured creditors were yet to be established.
Inland Revenue is owed about $101,000 and the 15 known secured creditors include ANZ Bank with a security agreement of $395,000 and other businesses due about $90,000.
The total amount owed to more than 55 creditors is still being calculated. A book value of about $218,000 is estimated for remaining inventory, but the value of other assets which could be sold was still being worked out.
Mr Oorschot said funds were probably available for preferential creditors such as staff, but the value of company assets and liabilities had yet to be confirmed.
He said unsecured creditors were unlikely to be paid back.
Directors advised him the privately owned footwear business had met an increasingly challenging operating environment the past two years after many years of supplying quality footwear at competitive prices, he said.
“While multiple factors are at play, the challenging environment is primarily a result of changing consumer-purchasing behaviour, increased competition from non-traditional and global entrants, and most significantly the poor economic conditions resulting in the current cost of living crisis.”
He said the shareholders and management had taken steps, including injecting shareholder capital, to try to streamline the business and maintain sustainable trading.
“In spite of this, the economic turnaround that was expected has not materialised, and as part of ongoing financial advice, the shareholders have made the decision to put the company into voluntary liquidation to mitigate any further potential loss to creditors.”
Street Legal Shoes sold a range of mid-market footwear including brands such as Vans, Dr Martens, Birkenstocks and Crocks. — Allied Media
