Smiths City administrators push for liquidation as claims mount to $25 million
Friday, 26 September 2025
Smiths City administrators are pushing creditors to tip the company into liquidation at next week’s watershed meeting after it fell into voluntary administration this month and racked up almost $26 million in creditor claims.
But $10.5m of the claims were owing to unsecured creditors who weren’t likely to see anything, administrators said.
The 107-year-old company went into voluntary administration on September 2 with BDO’s Colin Gower and Diana Matchett appointed joint administrators.
At the time of administration Smiths City ran nine stores, mostly in the South Island, and employed around 137 staff. All stores had been shut since then, except the chain’s Colombo St store in Christchurch.
In their first report released on Wednesday, Gower and Matchett said the company was insolvent so didn’t have a deed of company arrangement (DOCA) which would keep the company trading through the administration as with most other cases.
Instead, the only options were liquidation or returning the company to sole director Colin Neal. They ruled out the latter, recommending liquidation as the “orderly wind-up” path after selling off all company assets.
Neal told other media he would “absolutely not” buy the assets and try again to revive the business.
“As the company is insolvent and with no DOCA proposed, an orderly wind up needs to occur,” administrators said.
That would let secured and preferential creditors recover amounts due. But unsecured creditors with claims at more than $10.5m weren’t likely to get anything back, Gower and Matchett said.
Based on accounting records, total creditor claims were at $25.7m, including $9m in secured claims due to ASB Bank, Polar Capital (director Colin Neal’s vehicle) and Smiths City Finance. The bank was claiming $2.2m, while Smiths City Finance claimed $651,000.
The company’s 100% shareholder Polar Capital is claiming more than $6m after injecting the funds into the company since 2020 to keep it running, Neal said in the report.
The company also owed gift card holders $362,000, but Gower and Matchett said it didn’t have their contact details. Gift card holders would only get what’s owed to them by contacting the administrators directly.
Secured creditor claims were more than $5m, with Australasia’s biggest mattress and foam manufacturer, Comfort Group, claiming the most at $2.9m. Other secured creditors included Electrolux, Samsung and Bosch. Meanwhile, 106 preferential creditors were claiming $1m.
Background
Founded in Christchurch in 1918, Smiths City became a familiar brand nationwide, selling furniture, appliances and electronics. Its assets were sold out of receivership to Neal’s investment fund Polar Capital in May 2020.
About a week before appointing administrators, Neal had told The Post the company was downsizing as consumer spending was down and the business had contracted 40% in the last two years: “It’s the economy … you don't buy a TV to eat.”
In the report, he claimed to have left company management unchanged when he bought the business but stepped in as managing director in early 2024. At the time, Neal moved to close unprofitable stores and reduce staff numbers when it failed to keep up with supplier issues.
“Hindsight is always 20/20, but with the benefit of seeing the effects Covid had on the economy, several decisions taken in the years following the purchase would have been better left until the uptick in the economy was more evidenced [sic],” Neal said.
He said, “It was evident in the June to August 2025 period that trading conditions were becoming markedly worse, with no horizon for an economic reset that would provide the impetus needed to bring stability and assurance to consumers.
“After many months of trying everything humanly possible to support growth and stem margin creep, the decision to move into voluntary administration was taken by myself.”
He opted for voluntary administration this month after attempts to sell the business fell through. Neal said in the report that trading conditions deteriorated in 2025, with reduced stock on hand, mounting creditor pressure, and no funds to support ongoing operations.
Accounting records showed the company had not been profitable since 2022, and made a $4m loss in 2023. That had widened to a $13m loss by March this year but administrators said there were a “significant number of issues with the accuracy and reliability of the financial information”.
Neal said he appointed administrators when it was clear “the business could not be moved back into a positive trading state”.
“This step will see a 100+ year New Zealand-born and bred brand essentially disappear from the NZ retail landscape,” he said.
The company’s watershed meeting is set for October 1 in Christchurch when creditors would decide whether to tip it into liquidation at the recommendation of administrators.