Line 7 says cut-price stock selling well
The receivers for clothing company Line 7 say a 60 per cent off sale of its stock is going extremely well, with 3 1/2 weeks of sales done in a day.
But it is too early to say what impact that will make on the financial status of the brand.
Receiver Grant Graham of KordaMentha still hopes the company's brand will be snapped up. "There's been a quite a lot of unsolicited approaches. That's of no surprise to me."
The brand is the company's main asset, along with the stock. Mr Graham declined to put a number on the turnover from the sale or on the amount of debt the company owes. But he said there were very few local creditors. Those who were owed money were almost all overseas suppliers, where the company does its manufacturing.
The fate of the 110 staff was unknown as yet but "there will be job losses". Sixty-five are retail staff in the company's 11 stores which, unless there was an offer for the entire company, will close in a couple of weeks. Money had been set aside for redundancy payments.
Meanwhile, discussions were still going on about a deal that Line 7 had lined up for the Rugby World Cup 2011 through Canterbury clothing, of which Line 7 owner and director Ross Munro is a shareholder.
Mr Munro stressed yesterday that Line 7's position had had no effect on the business operations on Canterbury, although it might on its shareholding. "Canterbury is an entirely separate structure, it has separate staff, it has separate bankers, and the only issues are around shareholdings."
The receivers have not commented on the reasons for Line 7's demise, but it has been attributed to the economic downturn and recent big falls in the dollar. The company, which exported to Australia, Britain, the United States and the Carribean, had chosen in this instance not to hedge hard, Mr Munro said.
Customers had also been slow to pay bills and the firm had not reacted quickly enough to cut overheads. Attempts to get out of shop leases or license the casual brand to other companies had failed.
Mr Munro bought Line 7 out of receivership 19 years ago.
The Dominion Post