EziBuy tipped into liquidation by creditors

Creditors of EziBuy are owed more than $100 million. Photo / Mark McKeown

Creditors of EziBuy, who are owed more than $100 million, have tipped the group into liquidation.

It follows a recommendation by its now-former administrators, who recommended Ezibuy and its subsidiaries be wound up at a watershed meeting.

Companies Office filings show those creditors voted in favour of that recommendation on Wednesday, with Olvera Advisors Damien Hodgkinson and Kate Barnet, who were the administrators, appointed liquidators.

The group, which Australian-listed Mosaic Brands own, was put into administration in April.

At the time, Mosaic said EziBuy’s performance had been at odds with the strong and continued digital growth of its “omnichannel brands”.

In Barnet and Hodgkinson’s report ahead of next week’s meeting – sent to BusinessDesk last week – it was recommended the company be wound up with no deed of company arrangement put forward to consider given the group’s insolvency.

The pair said the group’s insolvency was due to falling sales, constricted working capital and a general tightening of the New Zealand economy post-Christmas.

“The decline in sales driven by both internal management decisions and general market trading factors meant that the distribution and head office overheads to operate the reduced sales level was significantly higher than required.”

The company was also carrying “significant costs” from its former head office lease in Auckland, which it left in March last year but couldn’t find an alternative tenant for.

According to the report, as at the start of April, it owed roughly $48m to the Commonwealth Bank of Australia, $16.3m to Melbourne Securities Corporation and A$7m to Mosaic – they were considered secured creditors.

It owed $1.7m in redundancies, with another $543,000 outstanding in annual leave. It also owed about $42m to unsecured creditors.

The first liquidators’ report is due next week.

Hodgkinson and Barnet, as well as Mosaic, have been approached for comment.