The Bed People owners oblivious of failed company's financial state, liquidator says

Thursday, 13 February 2020

The Bed People owners Robert Flanagan and Brenda Flanagan were unaware of company's financial state, the liquidator says.

The owners of insolvent bedding retailer The Bed People that owed more than $932,200, were unaware of the business' financial state, liquidator says.

Bed & Linen Limited, which traded as The Bed People, was placed into liquidation on January 17 by owners Robert and Brenda Flanagan, leaving dozens of customer orders in limbo.

Liquidator David Thomas said there more than 30 customers were affected by the liquidation but almost half of the customers' orders had been delivered.

Thomas said the company traded while insolvent for at least a year before the liquidation because the Flanagans 'had no idea' of the company's financial health.

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The Flanagans had not been preparing forecasts for the business and were not monitoring profit margins to ensure sales covered the costs of running the business, Thomas said.

'Bob and Brenda put hundreds of thousands of dollars into the business. They sold their house to keep it going when they should have just walked away.' he said.

The Bed People had stores in Auckland and Hamilton. It was previously called Beds R Us. The two remaining stores in Wairau, Auckland and Te Rapa, Hamilton would close this weekend and staff would receive their final pay next week, Thomas said.

The Flanagans have been approached for comment.

Customer Sandra Kaminski bought a super king mattress and two king single beds, from the Newmarket store for $8631 a week before the liquidation. She has not received the bed.

She paid for the bed with the inheritance from her late father.

Sandra Kaminski bough two beds and mattress from the Newmarket store. She felt deceived by the company.

Kaminski said she felt deceived by the company as she was only informed about the liquidation on Tuesday, when a woman acting for the liquidator called her.

'For nearly $9000 you'd think at least someone would've reached out. It's making me nervous that this isn't being dealt with properly.

'I never should have trusted Bob. He was pushy and wouldn't stop talking when he sold us the beds. He also gave a further 60 per cent discount without me asking for one,' Kaminski said.

Thomas said customers who had bought beds after the liquidation would have their beds delivered within three weeks, as their money had been put into a lawyer's trust account.

However, those like Kaminski, who had bought beds before the liquidation would need to wait until funds from a bank guarantee were released, Thomas said.

'Bob and Brenda have agreed to pay for the customers' beds from the bank guarantee they paid to the landlord. Once the lease is handed over to someone else the funds will become available.

'I don't know how far that is. But we're close,' he said.

Another customer, Marie Cameron, who bought a $3000 bed on January 3 was promised her bed would be delivered on Friday this week.

Cameron said when she bought the bed the sales person did not give me any indication the company was not doing well.

Cameron was skeptical about the quality of the bed she would receive.

'I think I'd rather have my money back.'

Since 2018, the Commerce Commission had received two complaints about The Bed People.

One was a customer complaint, the other was about a soured franchise agreement.

Neither was investigated.