Pumpkin Patch may close some US stores
Pumpkin Patch will look at the viability of keeping all its US stores open after its half yearly results showed US operations were continuing to make losses.
The United States operations recorded an ebit loss of $8.9 million even though retail sales were up 50.6% to $27.3 million.
The increase in sales is partly due to the higher US dollar compared with the New Zealand dollar and the 16 new stores the company has opened.
Earnings losses in the US and the UK had dragged down results at Pumpkin Patch, which today reported a 7% drop to $9.5 million in net profit for the half year ended January 31.
Without the US results the group’s ebit would have been up 9.5%.
Chief executive Maurice Prendergast says: “The extremely volatile conditons up there lead to a disappointing result for the US business.”
“It is hard to see the end of the drama in the US,” he says.
Pumpkin Patch has already cut headcounts in both the company’s 34 stores and in the US head off and improved the supply chain but Mr Prendergast says they would be looking at each store.
He refused to comment on the future of those stores but would not discount that some might be closed.
“I’m not prepared to commit. We won’t know for a couple of months,” he says and adds the company hasn’t seen the benefits of staff redundancies and restructuring yet.
But Prendergast says that the board still believes Pumpkin Patch have a place in the US market and this is supported by sales at the department stores.