Monday 5th September 2016
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The Inland Revenue Department has filed an application to liquidate the business behind the Silverdale Mad Butcher store, the latest issue to hit NZX-listed hospitality company Veritas, which owns the franchise rights.
IRD's bid to liquidate Lovett & Sons Limited will be heard at the High Court in Auckland on Friday, according to a public notice from the tax department.
The Silverdale store opened in 2012 after the franchisees moved from Orewa, where the store had been open for 12 years.
In its unaudited annual results published last week, Veritas said three Mad Butcher stores had closed in the second half of the year because they were "consistently unprofitable." The Auckland-based company described the market as very competitive,"with supply shortages creating challenges around product choice and pricing."
Veritas said the majority of stores were trading profitably but earnings before interest, taxation, depreciation and amortisation fell 28 percent to $4.57 million. Sales fell to $9.8 million from $12.1 million.
Thirty-one Mad Butcher stores are franchised, with two owned by Veritas.
The original Mad Butcher store was liquidated in July, with the liquidator Peter Jollands arguing the business model was flawed and unsustainable.
Shares in Veritas were unchanged at 32 cents and have fallen 33 percent since the start of the year.
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