Covid 19 coronavirus casualty: The 'sad liquidation' of Village Kitchen

Village Kitchen switched from selling fresh meals to frozen meals during the lockdown. Photo / Supplied

Not even a surge in online sales during lockdown could save ready-made meal company Village Kitchen, which has become another Covid-19 business casualty.

Auckland-based Village Kitchen was placed into liquidation on May 20, and Digby Noyce of RES Corporate Services appointed.

Noyce said the business, which was founded by Rebecca Jones in July 2015, had been directly impacted by Covid-19.

"Being shut down, they weren't able to do fresh-food deliveries so that cut out a lot of their business.

"They continued to be able to supply frozen meals, but there were additional costs for delivery, and it made it very difficult to continue," Noyce said.

"It's a pretty sad liquidation in that they really tried hard to make it work and it got to the point where they couldn't afford to put more money in - they had to call it a day," he said.

"There were very few creditors and only a couple of current creditors, the only people who really lost any money was [the owners]."

All staff were paid in full.

Noyce said the owners were "basically earning nothing" after outgoings, and Jones had not been paid for "quite a substantial amount of time".

Rebecca Jones, founder of Village Kitchen. Photo / Supplied

He believed the business model was still viable and was now looking to sell it as a going concern.

There had been a couple of expressions of interest so far, he said.

"You need somebody who is a chef to own it to reduce the overheads ... it could be viable for someone else who is able to [do that].

"The business had become profitable before shutdown. When shutdown happened it cut out most of their business - that I think will pick up again, I don't think that's something that is terminal, but it isn't going to be picking up in time to save them."

Noyce said Jones had made the right call to place the company into liquidation rather than seek a loan to help keep the business afloat.

"It's a sad situation.

"It's sad when you put your heart and soul into something for quite some time and it fails."

Last month, Jones told the Herald while the firm had been unable to sell and deliver its regular fresh meals, it had pivoted to sell frozen meals in bigger bulk sizes.

Online orders for its frozen meals had increased by 650 per cent during lockdown, she said at the time.

Noyce said the liquidation case was "one of the cleanest that he had seen in quite some time" and there was a lot of good will within the business, indicative of how Jones had ran it.

"She ran it in a very ethical and honest way."

The situation evolving Village Kitchen was not unique. A lot of businesses were in "deep trouble and living on optimism" following disruption from Covid-19, and many would be forced to close down, he said.