Postie Plus posts loss on costs to sell Babycity, centralise operations
BUSINESSDESK: Clothing chain Postie Plus Group reported a full-year loss after costs related to the sale of its Babycity business and relocation of marketing and distribution to Auckland.
The net loss was $183,000 in the 12 months ended August 5, from a profit of $656,000 a year earlier, the Auckland-based company says. Sales fell to $111 million, just ahead of the level it flagged on August 31, from $115.7 million a year earlier.
In May, the retailer said it was in breach of bank covenants and in August chief executive Ron Boskill said he would step down in January.
Shareholders in May approved the sale of 11 of its 18 Babycity stores to a company run by former LV Martin manager Trevor Douthett. Babycity "has not contributed sufficiently to our bottom line unlike Postie", the company said in April.
"We took the hit now with costs associated with the sale of Babycity, which no longer fitted our business model, and the decision to recruit new retail expertise, outsource our distribution systems and processes to a new purpose-built centre at Mangere airport and begin a progressive shift of key marketing and other functions to Auckland," chairman Richard Punter says.
Shares of Postie Plus fell 4.2% to 23 cents and are down 7.7% this year.
Excluding one-time costs, the company reported a full-year normalised profit of $493,000. The company will pay a final dividend of 1 cent a share on December 14 to shareholders on the register as at December 7.
Mr Punter says the retailer will "focus the business on extending the store and on-line presence of the iconic Postie brand, in order to be competitively positioned when consumer confidence recovered".