Top Retail, which operated the local Topshop and Topman stores, was in negative equity after generating $4.1 million of losses in its three-year life in New Zealand.

The first receivers’ report by McGrathNichol’s Conor McElhinney and Kare Johnstone show the retailer in negative equity of $2.9 million as at September 7, the date of receivership, after accumulated losses since its launch in 2014 outstripped the $1.3m of shareholder funds.

The shareholders of the retailer included interests associated with Kiwi clothing firm Barkers, Christchurch property investor Philip Carter and fashion designer Karen Walker and also extended loans totalling $6.1m to Top Retail.

The company’s stores on the high streets of Auckland and Wellington were closed in September after the receivers failed to find a buyer, leaving net debt owed to the appointing lender of $2m, the shareholder loans and some $1.8m to trade creditors.

The receivership was the latest in a line of retailers struggling to make a traditional bricks-and-mortar model work when online rivals avoid the overhead of a high street site and are accused of skirting customs duties that traditional vendors face.

Top Retail’s assets were valued at $8.1m, of which $5.9m was in furniture and fittings. The company had inventories totalling $787,000 at the time of receivership, and managed to sell all stock before the stores were closed, the receivers said.

Staff were owed $95,000 of unpaid wages and holiday pay when the receivers were appointed, and Inland Revenue Department was owed $55,000 of outstanding income tax and a further $1400 in GST.

In Australia, Topshop and Topman have been salvaged with Sir Philip Green and his UK-based Arcadia Group stepping in to take over the business.