Magsons, trading under the Nido brand, collapsed into receivership on Friday. Video / Will Trafford
The business which operates New Zealand's biggest homeware store has collapsed into receivership in further trouble after its builder went into liquidation last month.
The Companies Office shows Kara Johnstone and Conor McElhinney of McGrathNicol appointed today to Magsons Hardware which trades as Nido, the giant Henderson store that opened on June 1 with 100 showrooms and a 2.7ha footprint, offering everything from artificial flowers to couches.
"A stock discounting sale campaign will commence on-site shortly," the receivers said. "Parties interested in the business and or the assets are encouraged to contact the receivers urgently."
This follows the liquidation of Nido's builder Vijay Holdings in November, leaving creditors crying out for money from the business which built the giant store and was almost finished its 650-space carpark.
Vinod Kumar of Lynfield is a director of Magsons and Vijay and he founded the Nido concept, set to rival Ikea as this country's largest homeware store.
He has not responded to questions about the receivership.
But that move now endangers a $62m funding arrangement behind the property's $59m development.
Retired farmers contributed some of the $59m poured into a proportional share ownership scheme to buy the homeware store. Last month they were worried after the shop's builder went into liquidation last month.
Two ex-farmers in their late 70s and mid 80s from the Hawera and New Plymouth areas expressed concerns about their approximate $1m investment each into Nido, the giant Henderson store which opened in early June.
Magsons' director Vinod Kumar who conceived the Nido concept. Photo / Anne Gibson
They have been enjoying $5000 per month returns from Magsons as the tenant, with returns pegged at 8.5 per cent.
But the store's builder's collapse has left them wondering how safe their money is and today's receivership of Magsons worried them even more.
Pearlfisher Capital also contributed short-term debt finance of $25m.
Magsons' receivers issued a statement saying their appointment follows the contractor which built the building going into liquidation "and trading challenges during Covid-19".
That statement said who tipped Magsons into receivership.
"The directors of Central Assets Investment have appointed McGrathNicol as receivers and managers of Magsons Hardware Limited, effective from today.
"The directors concur with McGrathNicol's assessment that the timing of the opening of the store in the year of the pandemic created acute pressure on the financial success of the store. It is very disappointing that the vision of the founder of Nido, Vinod Kumar, could not be realised," the statement said.
Central Assets Investment is headquartered at the offices of Maat Consulting at Albany which managed the $62m financial offer.
Directors of Central Assets are Bruce Charles Ellis of New Plymouth, Mark Geoffrey Hughson of Hawera and Neil James Tuffin of Whanganui.
Central Assets Investment said today they "concur with McGrathNicol's assessment that the timing of the opening of the store in the year of the pandemic created acute pressure on the financial success of the store. It is very disappointing that the vision of the founder of Nido, Vinod Kumar, could not be realised."
A Nido customer fretted about an order.
"We are in the process of buying our first house and excitedly - probably stupidly - found a couch at Nido that we put on order and paid for half which was $1300. It is meant to arrive in January.
"I just called them and they said they can't release any stock and can't make changes to orders until they get a revised policy from the receivers," she said.
"Pretty stressful when you are trying to buy your first house and could potentially have lost $1300, and we still had another $1300 more to go," she said.
