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Postie Plus appoints administrator after bank pulls support

Postie Plus [NZX: PPG], the worst performing stock on the New Zealand stock market, has appointed administrators after its lenders withdrew support as the company continued to make ongoing losses.

The Auckland-based retailer appointed David Bridgman and Colin McCloy of PwC as administrators, saying attempts to recapitalise the business had been unsuccessful. The retailer's board also sought to sell the business outright, or find a new cornerstone shareholder. The administration should allow Postie Plus to keep trading so it can be sold as a going concern.

"Despite restructuring, optimising of the existing DC (distribution centre),and recent improvements to gross margin and market share, the company has continued to make ongoing trading losses," the company said in a statement. "The company's bank has been supportive through this period, but has decided it cannot extend its facilities further to cover ongoing losses."

In April, Postie Plus said it was in breach of its lending covenants and expected to remain so “for the foreseeable future,” meaning its bank funding is repayable on demand, though the arrangements it had in place with its bank were sufficient to meet the company’s forecast funding requirements up to July 30.

The company was hit by supply chain disruptions in the summer of 2012 and 2013 after outsourcing its distribution centre to a third party, while shifting its headquarters to Auckland, where it anticipated growth. After receiving legal advice, Postie Plus said it intends to "vigorously" pursue a damages claim.

The shares were halted on Thursday at 7.3 cents, valuing the company at $2.9 million. The shares have,slumped 72 percent since the start of 2012.


Comments and questions

There is another clothing outfit sailing very close to the wind too, so don't be surprised to see it join the close down club by years end.

Postie+ customers: Make the change to NZ made clothing or shop at little niche boutiques. More bang for your buck, better materials, and supports NZ made :)

Anyone who says the economy is going well just needs to talk to retailers. Trading figures have not returned to pre gfc levels and there is no likelihood of that changing in the immediate future. Politicians and analysts who say the country is currently do well are just kidding themselves.

yep because retailing is an essential profession isnt it?

If you remove the ticket clipping middleman, consumers are better off and nz inc is better off as human capital is redeployed to useful industries.

Cry me a river

The CPI grew 1.5% in the year to March 2014 - about half that increase came from housing and household utilities with the balance coming from rises in tobacco (up 10% mainly in excise duties), food (mainly dairy and eggs - which relates to higher compliance costs), health and transport against that communications fell 2.7% and clothing and footwear fell 1.2%.

So retailing is getting the hell kicked out of it - other sectors are doing better but not across the board - although I'd much rather be here than across the ditch, that's a train wreck unfolding.

Retail is a dying industry as technology takes over. In the same way that it was tough for blacksmiths to retrain when cars took over from horses it will be the same with retail workers and owners. But that isn't saying that it is a bad thing - we are a huge amount better off and productive now that it doesn't take days to get anywhere.

James who is going to employ all the people employed by retailers . Shops closing will put more pressure on the welfare system surely. You need to look at the bigger picture. Buying online is short sighted behaviour. We will end up paying more taxes to pay benefits for retail workers who have lost their jobs so some of the money saved from Internet retail buying will be lost.

Who knows who will employ them, jobs are lost and more appear every single day; we should neither pick winners nor subsidise losers but let the markets determine the most efficient place to employ people.

The low end cheap from china market has no barriers to entry & is flooded.

Natural selection process now takes place

Nothing to do with quality or NZ inc not, just simple oversupply of supply in seasonal goods

101 economics.

So right! My husband was a 'label basher' for years...but even he couldn't resist the Warehouse special of four pairs of Bonds undies for twenty bucks!
He always used to buy the seventy buck Calvin's from Smith & Caughey. Only difference now is, he doesn't let his Jeans ride down quite as far......

Why would you put money in the share market or managed funds when you can buy a house in Auckland, leave it empty for a year and get 12%-16% capital gain tax free and no risk at all.!!

I thought the branding, Postie Plus, wasn't the right name for a clothing retailer.

Purchasing Arbuckles for in excess off $9m, spending a fortune on it and in so doing scaring off it's traditional customers and then selling it for $4m does not make good business sense. The purchase of Rendalls was another disaster story which sucked up a hugh amount of funds.

It's not good news for anyone when retail companies go under - we need employment and we need competition in the market. It's all very well saying the future is in on-line shopping only but if the power goes off or the network goes down then everyone buying cheap goods on the web from China is stuffed.

Personally I hope Postie get through this.