Women’s wear fashion brand Max Fashions plans to close 17 stores in New Zealand as it failed to generate any revenue during the COVID-19 lockdown. Max Fashions currently has more than 40 outlets in the country. The clothing chain owned by Chris Grieve, Gary Hitchcock and James Whiting is restructuring and seeking creditor's compromise so it can keep trading.
The company has not paid rent since the end of March and negotiations with landlords have also failed as offers varied significantly. The company is requesting its landlords for a discount in rent in order to avoid its business from being liquidated.
The proposal that Max has sent to landlords says the brand has incurred considerable losses due to the lockdown and it plans to terminate 17 leases by the end of next month. Its shareholders don't have the funds to sustain the company through COVID-19 and the company therefore requests its landlords to take 30 to 40 cut in rents for the 2021 financial year.
Under the deal terms, landlords for most of Max's remaining outlets will receive none of April's rent, and 10 per cent of May's rent, as well as May's turnover. From June this year, the clothing company will pay varying rents based on the compromise, until the end of the lease. The payments will be made to landlords will be calculated as proportion of the base rent and a percentage of sales. For some longer leases, the company has agreed to pay a minimum amount from June 2022.
