![Kooky: Winter 2012 collection. [Main image: Wendell Levi Tedoro @ Zeduce.org.]](http://yaffa-cdn.s3.amazonaws.com/ragtrader/images/dmImage/StandardImage/Kooky - mid.jpg)
A New Zealand fashion chain has been placed into liquidation, citing the rocky economy and a flawed pricing structure as attributable factors.
Kooky Fashions Limited, which previously operated 14 stores across New Zealand, went into voluntary liquidation late last month with Steven Khov and Damien Grant of Waterstone Insolvency appointed as liquidators.
While an initial liquidators' report attributed the failure to a downturn in the economy, insolvency officer for the file, Kieran Jones has now spoken exclusively with ragtrader.com.au to reveal further details on what led to the company's collapse.
“The failure of Kooky was partly attributable to the financial downturn and the squeeze that put on consumer spending. This cut sales revenue and put pressure on the business model Kooky currently had in place and operated very successfully up to that point,” Jones said.
“The other attributable factor was the lack of fluidity in the pricing structure that Kooky employed when pricing their garments for the market. The pricing which Kooky used was not suited the current economic climate. The closure of the Christchurch store due to the recent earthquake also hit revenue hard.”
Jones also confirmed that while Kooky, at the time of the appointment, operated 14 sites across New Zealand from Whangarei to Christchurch, Waterstone Insolvency has recently shut down the brand's Pakuranga Westfield mall pop-up store to reduce the number of stores to 13 in total.
Going forward, Jones revealed that liquidators have taken action by cutting prices across all stores and have since seen a marked increase in sales and increased profitability.
However, the business failed to sell as a going concern on deadline day July 2, 5pm.
Despite this, Jones said liquidators are still negotiating with any interested parties that would like to purchase the business as a going concern, and are planning to “continue trading Kooky until a deal can be struck for the sale or until such time that it becomes uneconomical to continue trading”.
Recent reports indicate that ANZ National Bank holds a general security agreement over the business, with the bank and six other secured creditors owed a total of approximately $1.9 million. Total liabilities are reportedly around $2.7 million.
Kooky operates as a women's designer fashion business that caters for older women, sizes 18 to 22 (plus size market).