Smiths City voted into liquidation as creditors owed at least $25m

Thursday, 2 October 2025

Smiths City has been voted into liquidation by its creditors.

Creditors have voted to put Smiths City into liquidation at a watershed meeting after it fell into voluntary administration facing more than $25 million in claims.

Of that figure, $10.5m of claims owed to unsecured creditors were unlikely to be paid, the administrators, who are now the liquidators, earlier said.

The 107-year-old company went into voluntary administration on September 2 with BDO’s Colin Gower and Diana Matchett appointed joint administrators. On Thursday, a BDO spokesperson confirmed to The Press that creditors had voted on Wednesday to place the company into liquidation at a watershed meeting.

Gower and Matchett would stay on as liquidators.

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 last month, 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.

Smiths City owner Colin Neal stepped in as managing director last year when financial issues mounted.

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.