Pumpkin Patch a hard sell
The receiver of troubled children’s clothing retailer Pumpkin Patch wants to move quickly on a possible sale of the ‘‘well-known brand’’ but admits it will not be easy.
The company was placed in voluntary administration and receivership ‘‘with considerable regret’’ yesterday.
McGrathNicol was appointed administrator, while Pumpkin Patch said it also understood its bank had appointed receivers KordaMentha to the company.
KordaMentha receiver Brendon Gibson said all Pumpkin Patch stores would remain open during the receivership. But some are likely to close within weeks, although a number of parties had already expressed an interest in buying the business.
‘‘Sadly, this will result in some job losses and we will be communicating directly with the staff concerned as soon as possible.’’
Pumpkin Patch has about 600 employees across 43 stores in New Zealand, and 1000 staff in 117 stores in Australia.
Gibson said rules for listed companies had prevented receivers from being able to inform staff about the ‘‘particularly distressing’’ news before going public.
The receivers said they would ‘‘optimally’’ sell the business but it was early days.
‘‘Our hope is that new owners can be found to build on Pumpkin Patch’s heritage as an iconic brand in New Zealand and Australia. I’m not saying it will be an easy process.’’
Gibson said unused gift vouchers would be honoured on a dollar-for-dollar basis, which meant a $40 purchase could be paid with a $20 gift voucher and $20 cash. ‘‘We’re trying to give some value to card holders.’’
Pumpkin Patch chairman Luke Bunt said the company made significant progress last year in the four-year turnaround programme in a challenging retail market.
‘‘That progress has continued in the first quarter of this financial year,’’ he said.
‘‘However, despite considerable efforts by the board and its management team, it has become evident that no solution is available to the company, at this time, to address the current over-leveraged and significantly capital constrained position.’’
With no likely solution available, the the only appropriate action to best protect the interests of stakeholders is to appoint administrators, he said.
The future of the company was in doubt last week after it went into a trading halt following struggles with too much debt and not enough money.
On Friday, Pumpkin Patch told shareholders it would put forward proposals to its bank by October 31.
After years of declining sales Pumpkin Patch had seen its market capitalisation dwindle to just $10.1 million from a valuation of $231m in 2013.
Pumpkin Patch made a $15.5m loss for the year to July, 31, but said it was at a ‘‘very early stage of its recovery journey’’ and ‘‘apparel retailing continues to be highly competitive and challenging.’’
It said declining sales were due to store closures, and a decline in its international wholesale business and northern hemisphere online business.