Popular women’s fashion chain to shut down 17 stores after suffering ‘considerable losses’ during the coronavirus lockdown
- New Zealand clothing chain Max set to close 17 stores after COVID-19 pandemic
- The business suffered financial strains and low revenue during forced closures
- Directors are working with landlords to reduce rent and keep the company afloat
- Management have taken a pay cut, while the number of job losses is unknown
- Here’s how to help people impacted by Covid-19
A women’s fashion brand is preparing to shut down 17 stores after generating low revenue during the coronavirus pandemic.
New Zealand label Max suffered considerable losses through forced closures and strategies to prevent the spread of disease during the COVID-19 lockdown.
The company is undergoing a restructure and has sought a creditor’s compromise with landlords, while senior management staff were forced to take a 30 per cent pay cut to keep the label afloat.
Of Max’s 42 stores in New Zealand, 17 are set to be closed, with the number of staff affected unknown.
New Zealand clothing chain Max (Manukau store pictured) is set to close 17 stores after the COVID-19 pandemic
‘We have had to make the immensely difficult decision to potentially make significant redundancies of a number of our dedicated staff,’ Max managing director James Whiting said in a statement.
‘We are absolutely devastated – but this decision had to be made to ensure the survival of our business. We are a very close-knit team and to say we are proud of how our people have conducted themselves through these challenging times would be an understatement.’
It has been reported the company has not paid rent since March and is working to meet a compromise with landlords and reduce their rent to be able to continue trading.
There have been large differences in negotiations between landlords for different stores, with some not willing to reduce their rental price at all.
Max believe their trade will continue to be disrupted into the future through reduced consumer spending and lower foot traffic, along with alterations to their supply chain network (stock image)
The company proposal indicates landlords would be paid up to 40 per cent below their rental price until the end of the 2021 financial year.
Max was given $1.7million to support 284 staff through the wage subsidy scheme during the coronavirus shutdown.
The business believes trade figures will be affected into the future through reduced consumer confidence and spending and lower foot traffic, along with alterations to their supply chain network from the pandemic.
Mr Whiting said the label are confident they will avoid liquidation with cooperation from landlords.
‘This is an incredibly difficult but necessary process to ensure the future survival of this iconic New Zealand business,’ Mr Whiting said. ‘If the landlords approve the proposed formal creditor’s compromise, we are confident that we can continue on the exciting journey of rebuilding this iconic brand on the other side of this very difficult but necessary restructure.’
Max senior management have taken a pay cut, while the number of job losses is unknown. Pictured: a woman models pants from Max