Provenance in Manawatū aimed to elevate locally sourced produce and was insolvent last July.
Provenance in Manawatū aimed to elevate locally sourced produce and was insolvent last July.
The collapse of a Palmerston North restaurant that aimed to showcase locally sourced food is forecast to cost creditors more than $1.2 million.
But most of the amount owed appears to be due to the company’s directors and shareholders.
Provenance Food Company trading as Provenance Manawatū in Palmerston North was incorporated on February 9, 2021 and was tipped into liquidation by its shareholders last July.
CS Insolvency’s Hamish Pryde was appointed to liquidate the business on July 5, 2023 when the company’s first liquidator report was released.
Provenance’s six-monthly liquidation report was published last week and said the business had not found any potential buyers.
A breakdown of the company’s most recent accounts showed two unsecured shareholder lending claims came to $702,455.
But employee claims dropped from $12,800 to $11,427 while Inland Revenue (IRD) fell from $163,400 to $115,500 in the six months after the first liquidator’s report was posted.
The liquidator declined to comment when approached by the Herald.
Pryde added that two real estate agents have been contracted by the landlord to find a new tenant who will be approached to purchase Provenance’s existing chattels.
Inland Revenue is one of Provenance restaurant's secured creditors with over $115,000 in claims.
The company’s shareholders and directors are Kylie Faas, Harry Faas and Hew Dalrymple.
In 2022, it was reported the restaurant aimed to showcase locally grown ingredients but the mission has landed a raft of Manawatū businesses on Provenance’s creditor list.
Local food producers and wholesalers Central NI Food Wholesale, Stewart Dairylands, Arrosta Coffee, the Village Wine Trader and Chef’s Choice are all owed money by the restaurant.
Other Manawatū businesses making the creditor list are local accountants Allan McNeill, the Manawatū Car Club and Total Sheetmetals.
Harry Faas and Dalrymple are also on Provenance’s creditor list.
Other companies lining up with creditor claims include the ACC, DB Breweries, Genesis Energy, Bidfood, Heartland Bank, Nova Energy and Gilmours.
Pryde’s first report on the liquidation was released on July 6, 2023 and said the restaurant was initially successful with interest dying down and operating costs rising gradually.
“There was an extended period of fit-out for the premises. The business started well with good turnover but high costs,” Pryde said.
“Gross profit margins were not as good as expected and wage costs were above budgeted levels and rising inflation was a challenge to the hospitality industry.
“The directors actively sought advice and themselves implemented a number of changes to the business to improve profitability. The economic outlook is recessionary.”
Pryde wrote in the initial report that Kiwibank’s economic outlook released on July 5, 2023 “expects a shallow(er) double dip recession into next year” and outlines the bank’s economic outlook.
“The cost-of-living crisis has resulted in continuing declining turnover. More-so since April this year. The business cannot cover its overheads as a result. The directors have made the decision to stop trading,” Pryde said.
