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.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Comvita seeks to build SeaDragon stake with $3m convertible loan
- My top five 'Kill me now' moments in the NZME-Fairfax merger application
- ‘Considerable’ interest in Air NZ’s Virgin stake: Branson
- Wynyard says it has nothing to disclose after NZX queries 21% price slump
- Charity organisation Pact Group backs out of Invercargill social housing contract
Most listened to
- Sundy Business with Andrew Patterson featuring David Skilling, Bernard Hickey, more
- Matthew Hooton on Labour party’s reaction to the budget 2016
- Rodney Hide says the attack by University of Auckland over overfishing is nonsense
- Do social bonds make sense? Tim Hunter tells Andrew Patterson it’s not just about the warm fuzzies
- Business Week in Review with Grant Walker & Andrew Patterson