Use vouchers sooner rather than later - CNZ

Friday 18th February 2011 3 Comments

New Zealanders with Whitcoulls or Borders book tokens should redeem them as soon as possible, Consumer New Zealand says.

This comes the day after the two bookselling chains were put under administration in Australia and New Zealand by Australian parent company REDgroup Retail.

Whitcoulls' website announced that to redeem a gift card, a customer needed to spend at least twice the face value of the card, for example, by using a $30 card and $30 cash to buy a $60 book.

No new gift cards would be issued during the voluntary administration, it said.

Consumer NZ deputy chief executive David Knowles told NZPA consumers had to make the best out of a bad situation.

"It's far from ideal...but I guess in a situation where the company is basically one step away from liquidation, possibly, then this is probably better than nothing," he said.

He said it was probably best to redeem the voucher rather than wait to see if the company survived.

Legally, if there was a change of ownership, for instance, the new owners were not obliged to accept the vouchers.

"The best situation at the moment is to take the current deal if you can, because at least you can redeem them."

REDgroup Retail appointed Ferrier Hodgson as voluntary administrators and partner Steve Sherman earlier said in a statement that as far as possible it would be business as usual while an urgent assessment of the business's financial status was conducted and prepared for the first meeting of creditors. That meeting was expected to take place in the first week of March.

Sherman said there was "a lot of confusion" about gift cards or vouchers and asked people not to tear them up. "They may have value in any business that emerges from the administration process," he said.

Those currently holding gift cards or vouchers could redeem them by matching them dollar for dollar with cash, keep them for possible use in any business that possibly emerges from the administration, or make a claim for the face value of the gift card or voucher as an unsecured creditor.

National Distribution Union general secretary Robert Reid said staff in New Zealand were asking what administration meant for them as they had not been told anything by their employers,

"It takes a while to understand, as these things flow down, what impact they will have on each level. We are not happy with how this has been handled by the company.

"The company has been very obstructive in pay negotiations and instead of being open with us and their problems, they have been playing hard ball and acting like an anti-union company."

Reid told NZPA the next step would be to track down a representative of the administrators to find out what the move would mean for New Zealand staff.

The separately US-owned Borders chain also collapsed this week but is not linked to the Australasian chain.

New Zealand's Whitcoulls chain comprises of 65 stores, 40 of which are located in Auckland, Wellington and Christchurch, according to its website.

The chairman of Booksellers NZ Hamish Wright, said he was confident REDGroup Retail's problems did not reflect a fundamental problem with the book industry in New Zealand.

The issue for REDGroup Retail appeared to relate to their specific funding structure it would hopefully be able to restructure its financial position so it could strengthen its more successful stores, Wright said.

"Our hope is that all stores belonging to the group will remain open in the long term," he said.

He also reaffirmed the security of Booksellers NZ Book Tokens, which were redeemable at all 350 member bookshops nationwide, including Whitcoulls, Borders and Bennetts.

"REDGroup Retail have their own gift vouchers, but the Booksellers NZ Tokens are not be affected by REDGroup's difficulties as they are guaranteed by Booksellers NZ."

NZPA

Comments from our readers

On 18 February 2011 at 6:23 pm LJM said:

It stinks....nothing short of theft!

On 18 February 2011 at 9:23 pm Judy Pearson said:

that is so unfair.....

On 22 February 2011 at 9:59 am David said:

Effectively it is a 50% discount, if the company does go int liquidation the books will probably be selling at more than 50% discount. Its a gamble you have to take.