Windhoek Stuttafords mum on liquidation process

STUTTAFORDS Windhoek is mum on the future of the retailer after it refused to give details on the way forward for the luxury items shop.

South African media reported this week that Stuttafords in South Africa has been placed in a business rescue wind-down after 61% of independent creditors, who are owed a total of R836 million, last week voted in favour of this process over a liquidation.

Unless a buyer comes forward, this means assets will be sold and stores closed in order to realise money for creditors and the business.

“All information we have is the one reported,” said a media relations person over the telephone when contacted at the retailer in Windhoek, and she also refused to give her name.

Times Live reported on Monday that creditors include the retailer’s primary banker Nedbank, as well as brands such as Estee Lauder, Levi Strauss, Tommy Hilfiger and Polo. If the wind-down is completed, the name of the 159-year-old department store will fade into history, and the company, which will essentially be a shell, may still be liquidated.

Liquidation is the process of bringing a business to an end, and distributing its assets to claimants. Once the process is complete, the business is dissolved.

According to Investopedia.com, the debts still exist in theory, at least until the statute of limitations has expired, but there is no debtor to pay them, so they must be written off in practice.

The financial site says during liquidation, assets are distributed, based on the priority of various parties’ claims, with a trustee appointed.

The most senior claims belong to secured creditors, who have collateral on loans to the business. These lenders will seize the collateral and sell it, often at a significant discount, due to the short time frames involved. If that does not cover the debt, they will recoup the balance from the company’s remaining liquid assets, if any.

Investopedia added that next in line are unsecured creditors, which include bondholders, the government (if it is owed taxes) and employees (if they are owed unpaid wages or other obligations). Finally, shareholders receive any remaining assets, in the unlikely event that there are any. In such cases, investors in preferred stock have priority over holders of common stock.

Stuttafords’ CEO Robert Amoils was quoted in Times Live as saying that 61% of creditors voted in favour of the winding down. “It’s a positive outcome for the staff of the company, and given the circumstances, it provides the best outcome for creditors and other affected parties.”

In South Africa, media reports say that Stuttafords has five stores remaining out of nine at the beginning of this process. Canal Walk, Rosebank and Clearwater Mall were closed last month, and the store in Brooklyn Mall this week.

“Over the next few months, the remainder of the stores will be closed, subject to any further offer,” Amoils is quoted as saying. The Windhoek shop employs a number of Namibians. According to figures released last month by statistician general Alex Shimuafeni, the wholesale and retail sector is one of the sectors which shed jobs in 2016, where there were about 97 000 jobs in 2014, down to 65 000 in 2016.

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