Latest / Best of Business / Liam Dann: NZ Herald business editor at large on SPQR owing over $2 million to IRD, other creditors

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Liam Dann: NZ Herald business editor at large on SPQR owing over $2 million to IRD, other creditors · Best of Business

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  Speaker 2: Well, the first Liquidata's report into the iconic Auckland restaurant
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  Speaker 2: SPQR has been issued today. SPQR owes more than two
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  Speaker 2: million dollars. It owes IID almost one and a half
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  Speaker 2: million in payroll taxes and GST staff rowed one hundred
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  Speaker 2: and forty five thousand dollars in wages a holiday pay.
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  Speaker 2: Liam Van is The Herald's Business editor at large and
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  Speaker 2: is with us get Alium. Hey Jack, this is pretty ugly, right.
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  Speaker 3: Yeah, so this is you know, obviously SPQR is a
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  Speaker 3: shock and there's some things going on there. But you know,
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  Speaker 3: what we're hearing is really more and more from the
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  Speaker 3: hospitality sector that there are a number of probably quite
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  Speaker 3: i don't know word iconics, overused but well established Auckland
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  Speaker 3: institutions that are really on the brink at the moment.
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  Speaker 3: They're really struggling. You know, I heard from the owner
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  Speaker 3: of AVACI that she's she's concerned. They're trying to get
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  Speaker 3: a sort of a campaign going because you know, they've
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  Speaker 3: struggled through COVID and the lockdowns and all that stuff,
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  Speaker 3: and then they've run into this you know, supposed to
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  Speaker 3: be a rebound out of that, and of course they've
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  Speaker 3: run into this wall of high costs and high interest
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  Speaker 3: rates keeping people at home, and so you know, we know,
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  Speaker 3: I look at the data and it's I think the
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  Speaker 3: A and Z card spinning data showed that restaurants and
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  Speaker 3: bars were down about six point three percent in the
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  Speaker 3: last year. Now that's that's nominal spending. So even you
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  Speaker 3: know that all their costs are on top of that.
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  Speaker 3: And so if you've got high debt and you've got cash,
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  Speaker 3: you know, but.
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  Speaker 2: You just spin's going down, costs going up.
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  Speaker 3: Yeah, that's right. In fact, I looked at the nominal
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  Speaker 3: spend on all hospitality according to stats n Z in
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  Speaker 3: the last quarter was it's exactly the same number that
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  Speaker 3: it was pre COVID. So that's like.
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  Speaker 2: Flatlining, no accounting for inflation, no accounting.
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  Speaker 3: For costs and all that stuff. So these businesses going backwards,
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  Speaker 3: the owners are often not paying themselves a wage at
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  Speaker 3: this point. And of course we all we're all getting
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  Speaker 3: excited now we're going, oh, we can see the interest
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  Speaker 3: rates are going to come down, and there's light at
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  Speaker 3: the end of the tunnel. But we know from previous
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  Speaker 3: economic cycles that business liquidations, unemployment, you know, the credit
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  Speaker 3: credit crunch stuff, and mortgage e saales, these these bits
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  Speaker 3: of data lag, so it's almost worse. You start to
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  Speaker 3: start to hear the market start talking about all the
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  Speaker 3: good news and there are still some people really struggling
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  Speaker 3: out there, and that's what we're at the moment really.
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  Speaker 2: So Tommy two million dollars is a lot that's been
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  Speaker 2: building for some time. What are the liquid to say
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  Speaker 2: about their plan for the company selling off a seats
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  Speaker 2: and stuff.
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  Speaker 3: Yeah, yeah, Look, I'm not completely across what happens next there,
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  Speaker 3: I think. You know, you look at that amount of money, though,
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  Speaker 3: and you've got to wonder whether really they've held on
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  Speaker 3: too long just just but you know, SPQR it feels
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  Speaker 3: like something that just was sort of meant to be there.
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  Speaker 3: It's a sort of an institution. As long as I've
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  Speaker 3: been in Auckland, which is since about the time that
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  Speaker 3: it started early nineties, are you.
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  Speaker 2: Were always there with your flash suits?
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  Speaker 3: Well no, not quite. I remember going in the nineties
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  Speaker 3: and feeling hopelessly out of my depth. You know, it
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  Speaker 3: was such a big deal to go in there and
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  Speaker 3: there be a shortened street star and you know, probably
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  Speaker 3: probably probably carry with them there.
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  Speaker 2: Yeah they should be the first time A bet it, I'm.
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  Speaker 3: Sure, Yeah, but yeah, no, it's you know, but so
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  Speaker 3: there's there's two things. There is a cyclical thing and
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  Speaker 3: there is a structural thing. You know, people do change
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  Speaker 3: bars and restaurants to cycle over. You will go to
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  Speaker 3: new places, and there is obviously a lot of turnover
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  Speaker 3: in that sector. But I guess the message is if
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  Speaker 3: you're you know, we're going to go out and about
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  Speaker 3: spring is going to come along, Everyone's going to feel better,
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  Speaker 3: the interest rates are going to come down. You want
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  Speaker 3: to go out to your local bar. It just might
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  Speaker 3: not be there if you can't get out and support
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  Speaker 3: them in the next few months.
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  Speaker 2: And I know that this isn't necessarily the suggestion, but
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  Speaker 2: I mean that they're unlikely to get much help from
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  Speaker 2: central government.
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  Speaker 3: Right No, And I don't think I don't suppose they
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  Speaker 3: particularly wanted at this point because you know, it's yeah,
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  Speaker 3: there isn't anything that the government can do. It's really
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  Speaker 3: down to people getting out and because let's face at
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  Speaker 3: the government and the Reserve Bank are trying to put
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  Speaker 3: a curb on spending. That that switch will, you know,
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  Speaker 3: there'll be that will. It'll change, It'll change. There's gonna
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  Speaker 3: be a flick of that switch, but it just may
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  Speaker 3: come too late for some of these businesses.
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  Speaker 2: Thanks for your time, Liam, I appreciate it. New Zealand
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  Speaker 2: Herald Business airs through at large Liam.
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