Pricewise retains 100 staff and 'could be saved'

Monday, 24 August 2020

The Pricewise chain of 16 budget personal care, health and household stores could be saved, says receiver Steven Khov.

Khov was called in by a creditor to the retail business, which has stores in Auckland, Mt Maunganui, Palmerston North, Porirua, Wellington and Hamilton.

The 100 frontline staff in the business had been retained in a bid to keep Pricewise trading until a buyer was found, Khov said.

“There’s definitely an opportunity there for someone to buy it, and make a go of it, and reshape it, be it an existing retailer wanting to acquire something additional to add to their existing base, or someone wanting a ready established retail platform,” Khow said.

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Pricewise founders and shareholders Andrew and Gillian Berryman said they had retained lawyers and were fighting for a “better position”.

Khov said Pricewise owed a “seven-figure” sum to creditors.

The Auckland stores were currently shuttered, pending exit from alert level 3, but the stores around the rest of the country remained trading.

“Staff are going to get paid. They’re being paid by us at this point in time. There’s about 100 staff,” Khov said.

“Covid definitely impacted the sales, but I think ultimately, the business had other internal issues as well. It wasn’t just Covid,” Khov said.

Pricewise had received first round Covid-19 wage subsidies, and the receiver was working through whether there would be an application under the extension of the wage subsidy scheme.

A number of interested parties had come out of the woodwork already, Khov said.

Feelings ran high when receivers Khov, Kieran Jones and Thomas Rodewald took control of the business on Friday, along with its sister business Zenith Distribution.

“The director wasn’t exactly cooperative,” Khov said. “He was relatively hostile right from the get-go.”

Berryman said he called police after feeling receivers were overstepping their rights.

Auckland retail stores are having to cope with trading at alert level 3 under which many are closed.

“The police did turn up. They were very supportive,” Berryman said.

“We haven’t given up. We’ve got others parties helping us with legal to get a better position,” Berryman said.

“There’s a lot of legal stuff still happening, so there’s more to go yet,” he said.

Berryman said the receivers were called in by Polar Capital, which had made a shareholder loan to the business.

“We had a shareholder loan that got called. We don’t have any bank finance,” Berryman said.

“Sales have been a bit tough since the lockdown, and in the new one, the Auckland one,” Berryman said.

Retail spending plummetted during the nationwide lockdown in March and April, and the move to alert level 3 in Auckland has once again slashed spending.

“It’s been tough on a lot of people,” Berryman said.

Berryman said he and his wife had sold their home several years ago to fund the business, and were renting.