Company behind Wishbone owes creditors at least $2.3 million, liquidator's first report shows

Tuesday, 22 August 2023

In the aftermath of the liquidation, shoppers reflect on Wishbone’s pricing.

The company behind national sandwich chain Wishbone owes creditors at least $2.32 million, according to the liquidator’s first report.

Wishbone ceased trading on August 14 when The Woodward Group, a holding company used to trade the business, was put into liquidation by its owners.

About 110 staff spread across 17 stores, manufacturing facility and headquarters were made redundant.

Liquidator Mohammed Jan of Liquidation Management blamed the collapse on a decline in sales in stores, at the mercy of the new hybrid work-from-home model.

The report shows the company owes unsecured creditors $1.29m, staff $329,132 in holiday pay and Inland Revenue $400,000.

It also owes secured creditors Davis Trading Company $159,491, Cafe L’Affare $84,776, Van Den Brink Poultry $58,271 and Connect Capital $4930.

Wishbone was placed into liquidation and closed all its stores and factory last week.

Amounts owed to 10 other secured creditors, including Heartland Bank, were yet to be confirmed.

Jan estimated the business had assets worth $120,000 and $62,300 in the bank, leaving a shortfall of $2.14m owed to creditors.

Jan said Woodward was unsuccessful in securing a loan from Bank of New Zealand earlier in the year and had not been able to find investors to keep the business afloat.

“The director has completed the statement of affairs and stated that the company failed due to a decline in sales in the retail stores due to the new hybrid work-from-home model. However, inflation, recession, wages, and cost of goods increases affected them immensely,” Jan said in the report.

“The company has also incurred significant tax, and creditor debt and was not in a position to trade out.

“Some suppliers had stopped credit whilst others had reduced their credit limits and it made it incredibly difficult to obtain supplies. The directors tried to keep the business afloat by investing more capital but ran out of cash flow and funds..”

The liquidator is seeking further creditor claims by September 14.

Wishbone had 17 stores when its holding company was placed into liquidation

Wishbone was founded by entrepreneurs Andrea Gibson Scarlett and Shayne Scarlett, who set up hole-in-the-wall eateries to provide quick gourmet lunches for Wellington's city workers, hoping it would become part of their company culture.

Offering muesli, salads, soups, sandwiches, wraps, smoothies, cookies, muffins and slices to cater for breakfast, lunch and dinner, the husband and wife pair opened the first Wishbone store in Wellington’s Woodward St in March 2000.

It began expanding quickly soon after and by 2004 when it first entered Auckland it had established seven outlets in Wellington. It operated shops at Auckland, Wellington and Christchurch airports and one at Middlemore and Wellington regional hospitals.

In its heyday, Wishbone had become somewhat of a poster child for the Wellington business community. It had at least 23 stores up and down the country and was named as one of the country’s fastest-growing companies in the Deloitte Fast 50 list in 2003. It employed more than 3000 staff in its 24 years in business.

In a statement, the Scarletts said closing the business was the “hardest thing we have ever had to do”.

“Wishbone has been our life for almost as long as we can remember. We have so many great memories that we will always cherish. We are so very grateful to you all for all your support and for sharing our journey.”