Clothing collapse puts 470 jobs on line

Cartoon / Rod Emmerson

About 470 jobs hang in the balance as clothing maker Lane Walker Rudkin - which once employed Prime Minister John Key - goes into receivership owing more than $50 million.

The 105-year-old manufacturer is in the control of receivers BDO Spicers after its bank, Westpac, pulled the plug yesterday.

LWR sold the Canterbury clothing business eight years ago and stopped making any sports gear for Canterbury in 2005.

John Key worked for Canterbury International, then owned by LWR, when he was in his early 20s.

In New Zealand the Christchurch company makes team wear for adidas, but it does not make the All Black-branded clothing which is produced overseas.

The receivers say Lane Walker Rudkin's operations are unprofitable and the company has had to take on significantly more bank debt.

But its fabric-making and design subsidiary Pod, which it bought in 2007, appeared to be making money, receiver Stephen Tubbs said.

LWR is owned by Christchurch businessman Ken Anderson. As well as the Brisbane factory, it makes textiles, hosiery, underwear and other garments in Christchurch, garments in Greytown and Pahiatua and socks in Timaru.

The National Distribution Union says news of the receivership is its "worst nightmare".

"Hundreds of jobs are at stake and we are sure that poor management is at the heart of the problem," said the secretary of the union's clothing and textiles section, Maxine Gay.

Mr Tubbs said that a clear distinction would be made between the management of LWR and Pod operations.

Chief executive Malcolm Walkinshaw and chief financial officer George Gin would remain in place under this arrangement.