Wealthy family claims $35m in wage subsidies for retail empire, riling philanthropists

Sunday, 31 January 2021

The wealthy Norman family claimed more than $35m in wage subsidies for their retail empire, including department store Farmers.

The wealthy Norman family’s retail empire, which includes Farmers, Whitcoulls and Pascoes, has claimed more than $35 million in wage subsidies through its businesses, much to the annoyance of a philanthropic couple tracking the payments.

The Gama Foundation, a charitable trust run by Christchurch couple Grant and Marilyn Nelson, has given millions of dollars to causes they believe in, using funds from the sale of their PVC business in 1995.

Grant Nelson said he was concerned about rising inequality and the transfer of wealth through the wage subsidy to those who are already well off.

“Over the past few decades there has been steadily increasing inequality and the $14 billion wage subsidy has made the situation a lot worse,” he said.

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Grant, who is blind, and Marilyn Nelson from the Gama Foundation charitable trust are concerned about rising inequality which they believe is being made worse by the transfer of wealth through the Government’s wage subsidy scheme.

* The wage subsidy and retail: Which stores got it and who has paid it back?

* Staff angry and scared after Farmers, Whitcoulls cut pay

* The Warehouse Group tops retailers for wage subsidies at $67m

”The Government has now said that it cannot afford to deal with some urgent issues facing the community and has created a huge debt which future generations will have to repay. If those who wrongly obtained or retained the wage subsidy make repayments, that will go some way to reversing what has happened.”

He believes the retail empire of Auckland couple Anne and David Norman is likely to have bounced back from the Covid-19 lockdown like other chains including The Warehouse Group, Briscoe Group and Michael Hill International.

The NBR Rich List estimated the Norman family’s wealth at $560m in 2019 through their ownership of jewellery chains Pascoes, Stewart Dawsons, Prouds, Goldmark, and Angus & Cootes, as well as homewares chain Stevens, department store Farmers and bookstore Whitcoulls.

Through the Ministry of Social Development’s website, Nelson has calculated the wage subsidies claimed by Farmers, Whitcoulls and James Pascoe to more than $35m.

Some of the company’s staff had their pay cut by 20 per cent during the early stages of the pandemic, although it promised salaries wouldn’t fall below the $585 a week wage subsidy level. Some staff were also made redundant.

Despite the impact on retailers early on in the pandemic, Nelson said that when public companies began publishing their results last year, it became clear that they had done better in 2020 than in 2019 despite the lockdown.

Official data, including higher GST figures from businesses, a reduction in business borrowing, and an increase in business bank deposits, also point to businesses doing better in 2020, he said.

That suggests the Norman family’s retail businesses probably had higher revenue and were more profitable than in the previous year, he said.

James Pascoe Ltd didn’t respond to requests for comment.

Some high-profile retailers have paid back the subsidy after trading improved following lockdown. Briscoe paid back its $11.5m subsidy in October and The Warehouse paid back its $68m subsidy in December. Michael Hill has said it won’t pay back its $3.6m subsidy.