Founding Mad Butcher store in liquidation

The first Mad Butcher store in Mangere, founded in 1971 by Sir Peter Leitch, has gone into liquidation.

It is the sixth to do so since March last year and follows the recent closure of two other stores.

Four stores in the Veritas Investments-owned franchise [NZX: VIL] went into liquidation over a period of three weeks last year, which the company put down to “simply a coincidence of timing.”

But in March, NBR revealed the Mad Butcher’s Mt Wellington store had gone into liquidation, owing more than $1.1 million, on the back of poor trading conditions.

NBR has also reported the butchery chain taking ownership of the Manukau store and the closure of a “mini” concept store in Mosgiel after less than eight months in business.

Veritas announced in January a writedown of $5.4 million as it slashed profit forecasts, including impairments of $2.1 million related to the Mad Butcher.

Five company-owned stores were consistently failing to meet budget, causing it to label three of them as impaired assets.

Those stores, in Kapiti, Glenfield and Invercargill, have all shut down while in June a store in Christchurch was closed by its owner because of earthquake damage.

Now the Mad Butcher in Mangere, which was owned by Sir Peter until 2013, has gone into liquidation.

Companies Office records show the store’s owner opted for liquidation last Friday.

At least 10 Mad Butcher store owners have gone into liquidation since October 2012 while store numbers have more recently dropped from 40 to 34.

The Mad Butcher franchise was in 2013 bought by Veritas Investments for $40 million in a deal that made chief executive Michael Morton the biggest shareholder.

Veritas shares have improved from a low of 21c in April to 44c yesterday but have fallen from $1.33 since February last year.

The company said in May its three divisions – Mad Butcher, Nosh and Better Bar Co – were all showing signs of improvement, and reiterated guidance its annual profit from continuing operations would be between $3-3.5 million.

It has also announced it is seeking to roll out a franchise model for Nosh, its high-end supermarket chain.

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