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Line 7 blames volatile kiwi for receivership

Article – Businesswire

June 30 – Line 7 Ltd., the manufacturer of sailing and outdoor apparel, has entered receivership for the second time in its history.

Second iconic clothes brand to enter receivership, blames kiwi

By Paul McBeth

June 30 – Line 7 Ltd., the manufacturer of sailing and outdoor apparel, has entered receivership for the second time in its history.

The company has become the second high-profile clothing manufacturer to enter receivership in as many months, blaming the volatile currency for its demise.

The company, which employs around 110 people, failed to hedge for a significant fall in the currency and didn’t react to slow bill payments by cutting overheads fast enough, the New Zealand Herald reported. Receiver KordaMentha will hold sales in Line 7 stories before selling key assets such as trademarks, and it may be sold as a going concern. The company becomes the second iconic clothes manufacturer to collapse after Lane Walker Rudkin was put into receivership amid mounting bank debt.

Prime Minister John Key today told Parliament that he would look at the situation if approached, but would prefer a commercial solution was found.

“The Government has not had an approach from the company.”

Key noted that Line 7 had been rescued from receivership 19 years ago, and hoped this could be achieved again.

“We don’t want to see it lost.”

The company hadn’t approached the government to participate in the nine-day fortnight scheme, where companies can reduce staff hours by one day a fortnight and receive a government subsidy on wages.

So far Fisher & Paykel Appliances, Fairfax Magazines, Summit Wool Spinners, and an anonymous manufacturer have signed up to the scheme, which has saved a reported 377 jobs.

(BusinessWire)

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