The Bed People liquidates, owing $930,000 and putting dozens of orders on hold

Friday, 31 January 2020

When Melissa Gordon visited The Bed People store in Auckland's Wairau Park, miscommunication and lies created chaos, with one customer walking off with a bed.

Dozens of prepaid orders have been put on hold as bedding retailer The Bed People goes into liquidation owing more than $932,200.

Customer Melissa Gordon waited for over a month for a $2000 bed and mattress, which she was supposed to receive three weeks after Boxing Day.

The Bed People had stores in Auckland and Hamilton. It was previously named Beds R Us.

Bed & Linen Limited, which traded as The Bed People, was placed into liquidation on January 17 by shareholders Robert Flanagan and Brenda Flanagan.

* Two companies owing millions placed in liquidation

The Bed People store in Newmarket will continue to operate through the liquidation.

* Eco-house businesses in liquidation owing nearly $1m**

Gordon said communication from the company had been 'terrible' and said she was denied a refund.

'When we followed up we were told there was an issue with the manufacturer and it was going to be delayed. I don't know if that's what staff were told but they lied through their teeth,' Gordon said.

'When I went to the store yesterday at Wairau Park there were two other customers having the same problem. Someone ended up taking a bed from the store on his trailer - it was chaos.'

Liquidator David Thomas' first report said the company was trading profitably until the end of 2018.

While the 2019 and 2020 accounts had not been completed, the report said it was likely the company was trading while insolvent before the liquidation.

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Thomas said its Wairau Park and Newmarket and Te Rapa stores continued to operate to sell surplus stock, but the Manukau store had closed as it was unprofitable.

The Lower Hutt store, which had different owners, closed prior to the liquidation.

He said the Flanagans had agreed to buy stock from their personal funds to pay manufacturers as at least 30 orders were in limbo.

'It's rare to see owners buy stock in these circumstances. I've seen a lot of liquidations where the owners just walk away. These people are not walking away,' Thomas said.

The stores had about 10 employees that would be retained as Thomas was looking to sell the company as a going concern.

Thomas did not say for certain when beds would be delivered because that depended on the manufacturers' schedule.

He said customers would be contacted on Friday and given an estimated timeline for delivery.

'Most important for me right now is figuring out which customers paid for beds and had not received them yet. I'm working with the owners about how those beds are going to be paid for.

'There are beds on the floor that can be given out.'