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The company that operates Sounds and some Blockbuster stores has gone into voluntary administration - the first in New Zealand to do so.
Icon Digital Entertainment runs seven Blockbuster video chain stores and 50 Sounds music stores nationwide.
It also operates games retail chain Games Plus, which has six stores in the upper North Island and online retail.
BDO Spicers have been appointed administrators of the company.
Voluntary administration is an alternative to liquidation for companies in financial trouble. The rescue mechanism can be initiated by directors if the company is insolvent or if the directors think the company may become insolvent.
An administrator is appointed to come up with a proposal to put before the creditors to move the company forward.
It is believed Icon is the first company to go into voluntary administration since new legislation took effect on November 1.
Director Steve Dods is keeping quiet about the move but company records show the firm officially went into voluntary administration on Tuesday.
Posters on store windows announce the decision and direct all inquiries to BDO Spicers administrators Shaun Adams, Brian Mayo-Smith and Stephen Tubbs.
An employee at Sounds told the Herald that staff were told the news yesterday during a stocktake that all stores were told on Tuesday to do.
The Herald understands that store gift cards which have money loaded onto them are unable to be used at the stores.
Icon was created in July last year by Mr Dods, who launched US DVD rental giant Blockbuster in New Zealand in 1996. They merged with Sounds and Games Plus in September last year.
The seven Icon-owned Blockbuster stores are Highland Park, Kelston, Mt Wellington, Papanui, Papakura, Rotorua and Three Kings.
The other 33 independently owned Blockbuster stores are not subject to the move.
