‘Sad day’ for Pumpkin Patch story

The future of listed children’s clothing company Pumpkin Patch is uncertain after it went into a trading halt.

The business was struggling with a lack of money and too much debt, according to a notice on the New Zealand Exchange from chairman Peter Schuyt and managing director Luke Bunt.

Banking arrangements meant Pumpkin Patch could keep its doors open, but there was some doubt over its future.

‘‘Our ability to move forward from here is impacted by the lack of available capital for debt reduction and reinvestment. This represents a material risk to the ongoing viability of the business.’’

A disappointed Wellington shareholder said it was a sad day because he had clothed his children in Pumpkin Patch gear for many years.

‘‘I became a shareholder because they seemed to have a great investment story to tell as they expanded overseas. A few years ago it became obvious their strategy hadn’t worked, and now I’m over $8000 out of pocket.’’

Shareholders were advised in the statement that it was highly unlikely there was any residual value in the company’s equity.

Pumpkin Patch expected to make some headway in the next few days and make an announcement to the market. It said the main factor was a decline in the international wholesale and northern hemisphere online businesses.

During the year the company closed 12 loss-making stores, mainly in Australia. The NZX statement said the company had tabled options to address capital constraints.

‘‘Further work [on the options] coupled with discussions with the bank and certain key stakeholders had generated ongoing substantial uncertainty regarding the company’s future.’’

Last month, Pumpkin Patch reported a 71 per cent bigger loss this year than last.

Children’s clothing was a tough category in the global market, said First Retail Group managing director Chris Wilkinson. Even some of the biggest operators were finding it tough and with little success as market dynamics changed and fast fashion moved in.

Cotton On Kids is set to open at Sylvia Park in Auckland this month, in line with a new store concept rollout. ‘‘They have the size and buying power, which is why we are seeing the childrenswear landscape changing.’’

Another reason for the decline in the sector was the growth of second time around, he said.

‘‘Kids grow out of clothes quickly and [the clothes] are being sold on. When Pumpkin Patch started, Trade Me would not have been around.’’

Wilkinson speculated that the future of the company could be in the hands of a department store such as David Jones.

Otherwise there would not be many other options for Pumpkin Patch, he said.

‘‘David Jones just bought Australian men’s fashion brand Politix and have been inquisitive about taking over other brands.’’

Morrisons found this out in 2011 when it pumped £170 million into kids clothing, only to report a £164m writedown in its investment.

British kids clothing chain Adams went to administration three times between 2006 and 2010 before closing the stores.

Hopes up for Ikea store

An Ikea New Zealand Facebook page has been created, once again giving Kiwis hope that the Swedish furniture brand could finally be coming to New Zealand. The page appears to have been set up on Thursday night, and has the same profile and cover photos as the official Australian Ikea Facebook page. However, Ikea said the page was not an official page.

"A few years ago it became obvious their strategy hadn't worked, and now I'm over $8000 out of pocket." Wellington Pumpkin Patch shareholder

Vodafone offers back-up

Vodafone customers who are experiencing faults with their copper or ultrafast broadband service will be offered free mobile broadband so they can stay online. The company will also follow in Spark’s footsteps by more widely selling a 4G fixedwireless broadband service that it originally designed for rural customers. Consumer director Matt Williams said the offer of free mobile broadband would apply from Thursday if call centre staff were unable to immediately fix a fault with a copper or UFB broadband service.

Gym members left waiting

Members of the women’s gym Configure Express in Papakura, Auckland, say they are still waiting for refunds, more than two months after it closed. Dozens of members who were promised refunds by the gym believe they are being ignored and a number of staff who have resigned claim they are still owed wages. This week Configure Express managing director Greg Peters said money would be refunded, insisting his business was not in financial strife, blaming technical issues. In August members of the gym were sent a mass email informing them the gym would close and direct debits would automatically stop.

Port appointment for Elder

Former Solid Energy boss Don Elder has been appointed to the board of the Lyttelton Port Company. In announcing the appointment, parent company Christchurch City Holdings Limited (CCHL) said Elder, the chairman and chief executive of Spanbild Holdings, brought a focus on health and safety to the position, and had extensive knowledge of the port industry. CCHL also announced two other new appointments. Sabrina Kunz, who has a background in justice, real estate and crown entities, will join the Red Bus board. Former KPMG Christchurch managing partner Alex Skinner will join the Christchurch City Holdings board.