Veritas paid $1.77 million for the North Island gourmet supermarket chain back in 2014, when it was listed as a going concern. A turnaround plan was implemented, but failed to fly – the cracks were starting to show a year ago, when Veritas reported that Nosh achieved profitability for December 2015 but did not meet budget in the preceding two months.
In April, it announced plans to use a franchise model for the six company-owned stores, following the same strategy it uses for its existing Mad Butcher outlets. The Mt Maunganui and Constellation Drive outlets are already franchised.
In a blog post on the Nosh website, franchising was described as “an exciting business and lifestyle opportunity for anyone looking to partner with a gourmet food business with a great brand.”
Veritas said in a statement that the franchise blueprint could be used to expand the chain around New Zealand.
In its update for Q1 of FY17, Veritas remained upbeat about Nosh but cited ongoing operating losses.
“We expect the results to further improve with the increased trading over the Christmas period. The franchise marketing programme continues with encouraging levels of interest,” chairman Tim Cook says.
However, Veritas announced on December 14 that the revised facility agreement it had entered into with ANZ now requires it to deliver either an unconditional contract for the sale of Nosh, or a proposal to close and wind Nosh down by January 15 2017. If the business can’t be sold, Nosh must be closed and wound down by March 31 2017.
“Given the time available before 15 January 2017, the board cannot be certain that a sale of Nosh can be agreed by that date,” says Cook. “The board therefore proposes to investigate the proposal to close and wind down Nosh by 31 March 2017, as part of its strategic plan for the group.”