Women's fashion brand Max is preparing to close 17 stores due to financial strain caused by New Zealand's COVID-19 lockdown.
The brand reportedly generated little to no revenue due to the stringent restrictions and widespread closures implemented to combat the spread of the virus.
The seventeen closures make up roughly 40 percent of Max's 42 outlets across New Zealand. The number of staff impacted by the decision has not yet been revealed.
"We have had to make the immensely difficult decision to potentially make significant redundancies of a number of our dedicated staff," managing director James Whiting said in a statement to Newshub.
"We are absolutely devastated - but this decision had to be made to ensure the survival of our business. We are a very close-knit team and to say we are proud of how our people have conducted themselves through these challenging times would be an understatement."
Whiting confirmed that senior management have taken a 30 percent pay cut to reduce its costs.
The clothing chain, owned by Chris Greive, Gary Hitchcock and Whiting, will be restructured and has proposed a formal creditor's compromise with its landlords to ensure its continued trading.
According to BusinessDesk, separate negotiations with landlords were unsuccessful and there was significant variance in the offers on the table.
The company is seeking a compromise in which all landlords across the remaining outlets will reduce the respective rents if enough agree to the discount. It's hoped this will prevent the company from going into receivership or liquidation.
The company has reportedly not paid rent since the end of March.
"We appreciate this is a difficult situation for all parties involved and one which we have never encountered before - however with the support of the landlords we can get through this together and rebuild our businesses," Whiting said.
"This is an incredibly difficult but necessary process to ensure the future survival of this iconic New Zealand business. If the landlords approve the proposed formal creditor's compromise, we are confident that we can continue on the exciting journey of rebuilding this iconic brand on the other side of this very difficult but necessary restructure."
Max's owners believe trading will continue to be impacted for the foreseeable future due to the broader economic implications of the COVID-19 outbreak, a reduction in consumer spending, disruption of supply chains and less foot traffic.
Ministry of Social Development data shows the company received $1.7 million through the wage subsidy scheme to support 284 staff members.
The announcement follows the confirmed closure of seven Bunnings stores due to the impacts of COVID-19. The Warehouse Group also stated that six of its stores will close, with the loss of up to 1080 jobs.
If the proposal goes through, the following stores will be closed:
Broadway Newmarket, Auckland
ShoreCity Takapuna, Auckland
Queen Street, Auckland
Northwest Shopping Centre Westgate, Auckland
North City, Porirua
Outlet City Tawa, Wellington
Northlands Mall, Christchurch
High Street, Christchurch
The Palms, Christchurch