Listed children's clothing retailer Pumpkin Patch (PPL) have called in administrators to take over its loss-making operations in the United Kingdom.
In an announcement to the NZX this morning chief executive Neil Cowie said the 36-store UK operation was loss-making and worse news was on the horizon.
“The return on investment from the UK retail operation has not been acceptable and the current trading losses being generated only accentuate this. The economic environment in the United Kingdom and in wider Europe is extremely difficult and we believe it is going to get worse before it gets better. Therefore we expect the UK operation would continue to make losses for some time to come," he said.
Mr Cowie said a decision on the future of stores in the UK was now in the hands of administrators, but conceded a complete shut-down was possible. "We anticipate that if they cannot find any alternative options some or all of the UK stores will be closed," he said.
Mr Cowie said the move would costs PPL up to $5 million in cash and result in an additional $25 million impairment.
Shares in PPL closed yesterday at 70c.