Wild Pair went into receivership in November last year, despite the company opening new stores at Newmarket’s 277 Broadway mall in April and Northwest Mall in October.
The receivers said the reasons leading to it being put into receivership were a decline in revenue as a result of increased local and offshore online competition, as well as limited footwear and apparel sector growth in New Zealand.
Its 23 stores were whittled down to six in the receivership process, including sites in prominent malls across New Zealand.
It is understood a few of these sites have since been snaffled by more established retailers, like Storm.
The receivers say they conducted a full sale process to sell the business, but no offers were received.
“Consequently, the receivers are trading the business to realise stock and have also disposed of a small number of fixed assets. The receivers have also realised funds by assigning a number of leases held by the company to third parties,” the report says.
First Retail managing director Chris Wilkinson says Wild Pair not being scooped up for purchase shows retailers don’t want to take a chance on risks.
“Retailers and their funders need definites before they invest, not ifs and maybes,” he says.
He says the franchise would’ve needed a fair bit of capital in order to get back on its feet.
Wild Pair’s directors are founder Michael Donovan and son Paul Donovan, with Michael opening the first Wild Pair store on Queen St in 1994.
The money owing includes around $2.3 million plus interested to ASB, while staff are owed $342,000.
The inventory is estimated to be worth more than $4 million.
Where Wild Pair went wrong
One of the receivers of Wild Pair, William Black, co-authored a piece on The Register last year that noted the dangers of apparel retailing in New Zealand.
In the piece, Black and Conor McElhinney highlighted four common themes in apparel retailing that were leading to trouble:
- Being locked into unprofitable stores with no easy exit from the lease.
- An inability to compete effectively with overseas based online retailers.
- A lack of basic retail business metrics to manage the business.
- An inability to respond quickly to the changes in fashion and supply chain mismanagement.
Wilkinson says he doesn’t think the chain ending up in receivership was Wild Pair’s fault.
Instead, he says the market had changed and its customers were increasingly blending their purchasing between New Zealand retailers and overseas retailers, like Boohoo and Asos.
“They [Wild Pair] were just caught in the perfect storm,” he says.
“It’s that compound growth in offshore spending. No matter what happens in terms of the exchange rate, offshore spending continues to increase.”
Wilkinson says offshore spending is a symptom of there being a lot of “sameness” in retailing in New Zealand, with malls and main streets usually similar in their retail mix.
“The enthusiasm and appetite for the likes for Topshop when it came, as there will be for H&M and Zara, shows that people want some differentiation. They’re hungry for that and prepared to pay for it.”
According to its website, all but one of Wild Pair’s six remaining stores have closed.
Its Dressmart, Albany, Hamilton and Riccarton stores closed on 24 January, while its Sylvia Park store closed yesterday.
Its Dressmart shoes store will close this Sunday on the 31st of January.
Wilkinson says it’s unlikely to see the gap in the market filled by another Kiwi player when Wild Pair shuts down for good.
Fast fashion is pretty well covered here, he says, due to the likes of locally owned Glassons and Pagani, as well as more recent overseas additions like Topshop.
Read the full receivers report here.