Long-running Timaru kitchen business and linked companies placed in liquidation

Friday, 27 October 2023

Kitchens Direct, on King St in Timaru, has been put into liquidation.

A long-running Timaru kitchen business has been placed into liquidation, along with three other companies linked to it, but the man behind them says creditors and customers will be looked after.

Kitchens Direct (NZ) Ltd, which traded as Kitchens Direct, began in 1970 and was involved in the design, manufacture and installation of kitchens in Timaru.

It was put into liquidation earlier this month, along with Kitchen Direct Appliances Ltd, Kitchens Direct IP Holdings Ltd and Kitchen Direct Franchising Ltd.

The director and a shareholder of all three companies, Karl Te Raki, told The Timaru Herald he would ensure creditors were paid and customer issues were resolved.

“After 30 years being self-employed, it felt like time to move on to new opportunities,” he said on Friday.

“The liquidator is following his process to wind up the businesses. That can take time, but as he completes that process, I will be making sure that creditors are fully paid and that any outstanding customer issues are resolved.”

In his first liquidator’s report, Mohammed Jan of Liquidation Management said the three entities were placed into liquidation by shareholder resolution on October 10.

Jan said the director, Te Raki, told him the companies had failed because of a variety of factors.

Kitchens Direct director Karl Te Raki, pictured during a local body candidates meeting in Timaru in 2019.

Those factors included a “steady loss of customers over the years, an increase in material and labour costs/shortages, profit margins not achieved, profit plagued by debts, suppliers stopping credit due to non-payment and the ongoing effects of Covid-19”.

“The director tried to restructure the operations, including refinancing the loans, but was unsuccessful,” Jan’s report said.

“Further, substantial drawings by the shareholders affected the business’s cashflow.”

He said that after seeking professional advice, the shareholders had resolved to place the three companies into liquidation.

The first liquidator’s report for Kitchens Direct (NZ) Ltd listed 73 creditors including banks, Inland Revenue, ACC, and a range of businesses and customers.

Of those, the report listed the known amount owed to creditors as $302,873. There was a list of known creditors to whom the amount owed was not yet known.

According to the statement of affairs, in the first report, the company has assets with a book value of $247,577.

Jan warned those numbers could change as more information became available.

A sign on the front doors of Kitchens Direct’s premises on King St advises customers of its closure.

Kitchens Direct Appliances Ltd was incorporated in 2004 and was involved in procuring and supplying kitchen appliances based in Timaru.

The company has unknown assets, and it was not yet known how much was owed to secured creditors, which include ANZ, Inland Revenue and ACC, or to yet-to-be confirmed unsecured creditors.

Kitchens Direct IP Holdings Ltd, which was incorporated in 2021, holds the intellectual property for the Kitchens Direct franchise in Timaru.

The company has unknown assets, and it is not yet known how much is owed to creditors. Inland Revenue is listed as the only known creditor.

Kitchens Direct Franchising Ltd was the franchising arm of Kitchens Direct and was incorporated in 2021. It was also involved in the procurement and supply of kitchen appliances.

It was not yet known how much that company owed to creditors, which include Inland Revenue, ANZ and ACC. The company had estimated assets of $23,542.

Any creditors have until November 13 to file a claim with the liquidator.

“Creditors who do not make a claim within this period may be excluded from the distribution that may be made.”

In his report, dated October 17, Jan said it was not practical “at this stage” to give an estimate for the completion of the liquidation.