Less than two weeks after going into voluntary administration, the company behind New Zealand fast fashion labels Valleygirl and Temt has closed 30 of its 31 stores across New Zealand.
Receivers Conor McElhinney and William Black of McGrathNicol were appointed on July 26. McElhinney said on Monday that the company could not continue to trade, and eased public concen about unpaid staff.
“After undertaking a detailed assessment following our appointment, it has become apparent that the company is unable to continue to trade due to its financial position and stock levels.
“Consequently, we have had to close all Valleygirl and Temt stores today, other
than the Queen St store. We can confirm that all staff will be paid their wages for the period worked since the company was placed into voluntary administration on 22 July 2016; staff were paid on Friday for 22 to 26 July 2016 inclusive.”
McElhinney and Black say that based on their review of Valleygirl New Zealand Limited’s information, it looks like the cause of the company’s failure may have been poor trading of related Australian retailers, MHN Trading Pty Limited and Hanama Collection Pty Limited, which trade in Australia as Paper Scissors and Chicabooti.
These companies have also stopped trading. Australian company Jirsch Sutherland has been appointed as voluntary liquidator. According to McGrathNicol, both the Australian and New Zealand stores shared a supplier and were managed by an Australian head office. When the Australian business failed, the company could no longer secure ongoing stock supply.