31 Oct 2023

Supie directors stood down to make process easier, one says

From Checkpoint, 5:07 pm on 31 October 2023
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Photo: Supplied

Former Supie director Ben Kepes says the online supermarket's failure is tragic for everyone - and there are people lower on the food chain than the workers owed wages. 

Supie announced on Monday it had gone into voluntary administration owing about $3 million to creditors, with nearly all the 120 staff instantly losing their jobs and unlikely to be paid for their last two weeks of work or annual leave. 

Founder Sarah Balle launched the Auckland-based independent virtual supermarket in 2021 in competition with the two big chains. 

The company had three directors up until last Friday - when two bailed out just before the company's financial predicament was made public. One of them, Ben Kepes, told Checkpoint they had been spread around the country and stood down after they met on Friday to make the necessary changes easier.

"You actually need people to be able to sign pieces of paper physically, be on the ground, meet with administrators, go through documentation, all those sorts of things. So to give the founder and CE the ability to move at pace and to do that stuff without having us in Auckland, that's why we stood down."

He said they acted as soon as they knew the company was in trouble. 

"The way these things work is the directors have an obligation, as soon as they realise things aren't working, they have an obligation to take action and that's what happened. 

"I'm not going to litigate, go through a timeline of exactly when things happened, but suffice it to say that the administrators were called in on the weekend and they made their announcement on Monday - and it's in their hands now."

Asked when he realised things were not going well with the business, he said he was unable to comment for now but that information would come out through the administration process. 

"We were in the middle of a fundraise, and we had been really successful with that fundraise, and then ultimately that turned out not to be the case. 

"As soon as we were aware of the situation that we were in - and a lot of it relates to the capital raise that unfortunately I'm not at liberty to discuss - but as soon as we were aware of that we took action."

He did have sympathy for the workers, he said.

"Absolutely, the most important thing is a humanistic one - so outside of the legalities and those sorts of things this is tragic for everyone. 

"Lots of people have lost money, some people have lost their jobs, some people maybe put orders in and aren't going to get their stuff. No one is happy about this, no one has profited from this, so I have no end of sympathy for those people as a human being."

"In terms of what they're owed, that's with the administrators and I don't have any visibility over that." 

However, he said it wasn't the workers left worst off. 

"They aren't actually at the bottom of the food chain, there's a lot of other people that are far further down in the food chain than they are - myself included - but I have zero visibility around the administration process so that's a question for PWC." 

Supie raised about $10m in capital over the past 24 months, which Kepes said had gone into building a technology platform, marketing, setting up sales, and building a team. 

"There's a lot involved in any startup. There's even more involved when it's a startup that deals with inventory and product and hard goods and shipping stuff around the country." 

He told the programme there were a lot of problems with the duopoly supermarket system in New Zealand, but "the context I guess is that startups are difficult, and startups do fail, and it's sad and unfortunate but this is a part of having a vibrant [supermarket] ecosystem". 

Supie founder Sarah Balle.

 Sarah Balle Photo: Maegan McDowell Photography / Supplied promotional image

"It's disappointing for everyone, Sarah Balle put her absolute heart and soul and three or four years work into this business and frankly has done better providing competition in the grocery sector than anyone else has done before ... it's really sad for her, it's sad for staff, it's sad for investors and it's sad for New Zealand because Supie was providing some much-needed competition that sadly isn't really there anymore."

He acknowledged the leadership of the company was in part to blame. 

"Every founder, executive, or board member from a startup will say that every day they make mistakes and every day they try and learn from those mistakes and do better. 

"Overall I think we did a good job getting where we got, it's tragic that we didn't see success at the end of it and obviously some of that comes down to decisions that we made and some of it comes down to external factors."