Bankrupt Christchurch businessman Mark Taylor has been forced to wind up another company. Franchise Operations Ltd - formerly Stirling Sports Franchises - was put into liquidation in the High Court at Auckland last week, in the ongoing fallout from last year's Building Depot collapse, which had amassed debts of more than $8.6 million. Franchise Operations, formerly known as Stirling Sports Franchises, was put into receivership in December. The liquidation has left all unsecured creditors out of pocket.
Receivers had earlier sold the Stirling side of the business, including the brands and logos, in July for $850,000 to Lane Walker Rudkin Industries, whose directors are Ken and Patricia Anderson. The company's shareholder is Stirling Corporation Ltd, of which the Andersons are also shareholders and directors. The Stirling franchise had been managed through NZX-listed company RetailX, whose shell became British telecommunications company Plus SMS in March this year. Franchise Operations and its 88% shareholder, Lennox Corporation, were placed in receivership last December when ANZ called in a $2.9 million debenture after Lennox defaulted on a loan. Lennox is also now in liquidation.
Taylor is the sole director and shareholder of Franchise Operations, Lennox and RetailX. Taylor's wife, Janine, is a shareholder in Lennox Corp and RetailX, according to Companies Office records. Mark Taylor was bankrupted in May. RetailX owned 10% of the Building Depot and Taylor and his wife owned the rest. Building Depot paid RetailX a management fee.
Receivers Ferrier Hodgson said Franchise Operations' and Lennox's only asset was the intellectual property, including the trademarks, emblems and logos, associated with the Stirling Sports brand.
The receivership hasn't affected the ongoing operations of the Stirling Sports chain. The proceeds of the sale of the business were paid to debenture-holder ANZ and there was no money for other creditors, according to the receivers' final report. A settlement was reached between security interest holders Colin Taylor, Merilyn Taylor and Timothy Goulding.
Taylor's father, Colin, founded the Stirling Sports chain and ran it for more than 40 years before selling it to his son in 2003. By then, it was a 43-store chain. Mark Taylor soon afterwards bought the Building Depot from Fletcher Building.
The DIY chain's collapse came in the wake of increased competition with the introduction of Australia's Bunnings Warehouse stores, the expansion of Mitre 10 megastores and existing competitors such as DIY chain PlaceMakers and ITM. The Building Depot offered goods at the lower end of the general retail market, where competition had become more fierce.