Outlook grim for Kitchen Things creditors owed $16.6m, company on brink of liquidation
Kitchen Things went into voluntary administration and receivership last month. Photo / Jason Dorday
The outlook for creditors of Kitchen Things looks grim as administrators recommend the company be liquidated.
The first administrators’ report, released today, shows Kitchen Things and its related entities owe 396 creditors more than $16.6 million.
The group of companies, including Kitchen Things NZ, Applico, Jones Family Investments and Appliance Works, was placed into voluntary administration and receivership on August 20.
Administrators George Bannerman and Rees Logan of BDO Auckland said creditors had two options at a watershed meeting scheduled for September 24: return control to directors or appoint liquidators.
The administrators said that, given the companies are insolvent and unable to pay their debts as they fall due, they did not recommend the return of the companies to directors.
“On the basis that no party has proposed a deed of company arrangement [Doca] and the companies remain insolvent, it is the administrators’ current opinion that it would be in creditors’ interests for liquidators to be appointed to the companies,” the report said.
Receivers at Grant Thornton are continuing to trade the businesses and sell down inventory while looking for a buyer.
Who’s owed money?
The administrators’ report shows ASB, the sole secured lender, is claiming $9.9m. The amount is secured against all of the companies, and interest, fees and charges continue to accrue on the balance.
A total of 124 employees are owed $883,551.
Meanwhile, secured creditors, including Panasonic New Zealand, LG Electronics and Samsung Electronics New Zealand, are owed a book value of $1.9m, although they have lodged claims amounting to more than $5.5m.
The administrators said the book value of amounts owed to secured creditors were recorded in the companies’ records. The claims received have not been validated at the date of the administrators’ report and will include stock held on consignment.
More than 250 unsecured creditors are owed $3.5m.
What went wrong?
The administrators said that while Kitchen Things had benefited through the Covid-19 period, sales decreased significantly in the ensuing years.
“With the decline in sales and margins, the high fixed cost base made it unprofitable.
“Restructure steps were undertaken to reduce costs with store closures and staff reductions. However, it appears the attempts to reduce costs were unable to be done at a level that made the group viable on an ongoing basis.”
The report showed the group made a net loss after tax of $2.4m in 2024 and of $4.7m in 2025.
The company’s revenue dropped from $110m in 2020 to $50m in 2025.
Cameron Smith is an Auckland-based business reporter. He joined the Herald in 2015 and has covered business and sports. He reports on topics such as retail, small business, the workplace and macroeconomics.