Clothing stores fail as online sales soar

Jean Jones is the third local clothing chain to hit the rocks since the start of the year. Photo / NZPA

Jean Jones is the third local clothing chain to hit the rocks since the start of the year and experts say apparel retailers face an uphill battle.

The owner of Jean Jones is in liquidation owing almost $1.8 million. Only six of its 22 stores remain open.

Gina and Keri Condon bought Jean Jones out of receivership in 2010 but appointed liquidators to their company, Cozican Investments, last Friday.

Co-liquidator Amanda Atkins said that firm had 22 stores under the Jeans Jones and Platform brand, 14 of which were trading at the time of their appointment.

The liquidators have closed a further eight stores. The Jean Jones brand has been in New Zealand since 1969.

Secured creditors are owed about $600,000 from the firm, while trade creditors are claiming about $800,000, Atkins said.

Inland Revenue was claiming about $260,000 and employees were owed about another $100,000, she said.

It was too early to say whether trade creditors would get anything back.

Another clothing chain to hit strife this year is Shanton Fashions, which went into liquidation in June owing creditors around $7.7 million.

The brand has been bought from the liquidators, although the identity of the purchaser is not let public and it is not clear how many stores they intend to keep open.

It had 18 stores open when liquidators were appointed.

As well as this, the Identity women's clothing chain - which has 16 stores around the country - was put into receivership last month.

The receivers, at the time, said that the stores could continue to trade.

Forsyth Barr equity analyst Chelsea Leadbetter said the apparel sector had been under pressure in general and had experienced very low growth rates when compared to other retail segments, like hospitality.

While a falling New Zealand dollar makes buying goods from overseas' websites less attractive, it also drives up the cost for local retailers importing clothing.

"You've heard a few, particularly the listed retailers, start to talk about the concerns around the depreciation in the NZ dollar...at some point they're all going to face the same challenge," Leadbetter said.

Greg Harford, from RetailNZ, said online shopping was a big part of the pressure on local stores, particularly given the strength the New Zealand dollar until recently.

"Gone are the days where a Dunedin retailer was competing with another retail shop in Dunedin, they're competing with retailers in Auckland, Wellington and indeed London and anywhere else. It's quite a tough market...retailers need to be at the top of their game to thrive and prosper in that kind of environment," Harford said.