‘Strong interest’ in failed Wishbone business ‒ liquidator

Wednesday, 23 August 2023

The liquidator of failed sandwich chain Wishbone is negotiating with a number of potential buyers of the business that collapsed last week.

“There’s a lot of interest, and there’s a number of interested parties – a lot,” Imran Kamal, managing director of Liquidation Management, said.

Liquidator Mohammed Jan was working through offers and “negotiating with a number of interested parties”, Kamal said.

“These are serious offers, there is serious interest in it.”

He would not comment further.

Jan has been approached for comment.

Wishbone’s holding company, Woodward Group, owes creditors at least $2.32 million, according to the liquidator’s first report.

The 17-store chain ceased trading on August 14 when The Woodward Group, was put into liquidation by its owners.

About 110 staff across 17 stores, a production facility and headquarters were made redundant.

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

The liquidator’s first 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.

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.

He 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.”

Creditor can make claims up until September 14.

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 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.”