A popular dessert shop in K Rd is insolvent after Covid-19 lockdowns affected turnover. Photo / Google Images
A popular dessert shop in K Rd is insolvent after Covid-19 lockdowns affected turnover. Photo / Google Images
A popular Auckland central bakehouse has been declared insolvent after the family-owned business was unable to recover losses incurred during Covid lockdowns.
Karangahape Rd’s Pie Piper was placed in liquidation by its sole director and shareholder on April 21 with RES Corporate Services’ Digby Noyce conducting the liquidation.
The firstliquidator’s report, released in April, said: “The outbreak of Covid-19 and the resultant health restrictions had an adverse impact on the business resulting in significantly reduced turnover.”
Company director Danielle Butler could not be reached for comment.
Noyce reported the company wasn’t able to “generate sufficient profit to recover” from losses caused by lockdowns throughout the pandemic.
Pie Piper ceased trading in December 2022 and tried to find a buyer for the business until leases were terminated.
Noyce said in his report there were no employees at the date of liquidation but the company owed wages and leave pay of $6123.45 to five former employees.
He noted the company owed payroll taxes of about $128,414 and GST of $56,231 to Inland Revenue, and that Pie Piper had only completed annual financial statements and filed its income tax returns for the year ended March 31, 2021.
Work and Income’s Covid-19 wage subsidy search showed the company took over $200,000 in wage subsidies between 2020 and 2021.
Pie Piper’s unsecured creditors are claiming a total of $672,000, including shareholder loans of $478,500.
Danielle and Suzanne Butler at The Pie Piper & Doornuts on K Rd. Picture / Babiche Martens
The company was incorporated in 2014 by self-taught cook Butler who sold pies at local markets before establishing the K Rd shop in 2017 which also included Doornuts - a doughnut delivery business.
“When people come into our shop, we want them to feel like they’re coming into our kitchen and that they are part of our friend network,” Butler told the Herald in 2017.
For Californian-born Butler making pies and the American-style yeast-raised “Doornuts” was a passion project.
Magnolia Kitchen pays some money back to debtors
Meanwhile, a second Auckland bakery has made progress in repaying money to its creditors.
Preferential creditor Heartland Bank was paid $27,122 of the $123,638 initially claimed while IRD received only $50 of the $94,857 it claimed.
Employees were paid in full, with $18,781 paid out according to the second liquidation report.
In Magnolia’s initial liquidation report, Pronk said the business operated as a baked goods manufacturing and retail store with an attached cafe.
Gee announced Magnolia’s end on her Instagram account late last year telling followers: “I am incredibly heartbroken to announce Magnolia Kitchen effective 7th October 22 is in liquidation. I have given my all to this business over the past 10 years. 2 children, 1 wedding, 2 premises, 2 books, 1000s of cakes, countless friends, and insane amount of meaningful connections.”
She attributed Magnolia’s failure to “Covid and a poorly timed move to our massive (expensive) premises six weeks before the first lockdown and subsequent shortfalls within the business over the past 2.5 years”.
She told Instagram followers: “I am just sorry truly from the bottom of my heart sorry that I have let my family, staff (work family), stockists, suppliers, customers and loyal community locally and online down.”
The liquidator said cashflow shortages increased overheads for the business at a second location in Silverdale that opened in 2020.
