Stirling Sports

Christchurch textile manufacturer LWR is inching towards control of fashion management company Pod, after a third major shareholder agreed to sell.

South Island businessman Allan Hubbard has accepted LWR's cash offer of 50c a share for his 3.3 per cent stake, held through Hubbard Churcher Trust Management.  Major shareholders George Gould and Kevin Arscott agreed to sell their 24.5 per cent and 5.7 per cent stakes in June. LWR now has just over 40 per cent of Pod shares, but needs to secure 90 per cent before its offer closes on July 26.

Pod independent directors, who include entrepreneur Sharon Hunter, have recommended shareholders accept LWR's offer, which values the company at $22 million.  Directors said the offer fell within the 48c to 54c a share value range assessed by Ferrier Hodgson, and that Pod's business model was not the best for the future.  Pod director Murray Clarke and chief executive Malcolm Walkinshaw have also agreed to sell their minor share interests.

LWR's June 25 offer was countered by an $8 million bid for Pod's biggest asset, Designer Textiles, from Australian firm The Merino Company.  LWR owner Ken Anderson, a Christchurch accountant, said the counter-offer was a "surprising change of direction" from the Australian wool firm.

Anderson said LWR, which he bought in 2001, could enhance Pod's business but he wouldn't go into detail.

Set up in 1904, LWR (formerly Lane Walker Rudkin) is Australasia's second biggest underwear and hosiery manufacturer behind Pacific Brands.  The company has more than 1000 staff and is licensed to make, distribute and sell adidas sportswear in New Zealand and Australia.  It owns the Stirling Sports clothing chain in conjunction with Anderson's son, Mark, and the Champions of the World, which sells rugby gear.

Pod has three main operations: Design Textiles International, which makes fabrics, Michele Ann, a clothes designer for retail chains including Farmers and Max Fashions, and Mollers Homewares.

Christchurch's Anderson family -- owners of Lane Walker Rudkin (LWR) -- plan to expand the separately run Stirling Sports franchise, after quick success with its first megastore. The "big-box" format for the Stirling store at Tower Junction in Christchurch -- twice the size of existing stores -- would be followed at other sites around the country, LWR general manager Mark Anderson said.

The 600sqm Tower Junction store opened last weekend. "We've had really rave reviews from everyone who has been through it ... we had the Canterbury Rams through we had the All Blacks in there signing items, and we're very pleased with the trade," he said.

There were 31 stores in the franchise-based group, including two new franchisee-owned stores in Auckland's Sylvia Park and Queensgate, in Wellington, and they had recently poached Simon Pratley from rival Rebel in a management role. "There have been seven stores in the group refitted to the new (design) format. We'll have the balance of the group fitted in the next 12 to 18 months. "(Expansionwise) we're thinking 30 mall sites, and about a dozen big boxes over the next two to three years."

LWR -- the nation's largest textile firm -- recently has started a merino clothing brand, Everest, to tackle such firms as Kathmandu and Icebreaker. The brand was going well, and was being carried in Australia's David Jones stores and a giant New York store Paragon Sports, plus Ballantynes and other South Island boutique stores, he said. Everest cashes in on the company's connection to Sir Edmund Hillary's 1953 ascent of the world's highest mountain.

LWR, with 1200 employees and approaching $200 million of annual revenues, also makes a large amount of clothing for a range of clients, with expectations of some key contracts. In Australia, LWR has contracts to manufacture teamwear for rugby league clubs and school sides on behalf of brands including Adidas.

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.