UPDATED: Pumpkin Patch shares slide as the clothing retailer reports a 50% dive in operating profits and chief executive Maurice Prendergast resigns.

Children's clothing brand Pumpkin Patch has seen its half-year net profit drop by nearly 50% as it faces "challenging trading conditions."

Auckland based children's clothing specialist retailers Pumpkin Patch this morning announced a net loss of $26.74 million after accounting for impairments and one-off costs from closing stores in the US.

Net profit after tax including the US stores and non-recurring items was down 13.9% at $14.7 million, but US store closures led to impairments and one-off costs of $39.9 million.

Total one off items after tax were $41.45 million.

Pumpkin Patch has announced it is to close over half its US stores as it seeks to reduce overall costs.

After a four-month review of the operations the company has decided to close 20 of the company 35 stores in the US:  most of those set to close have not been open long. The remaining stores will be primarily based along the West Coast.

Pumpkin Patch’s CEO Maurice Prendergast said that the closure of the stores would create better financial outcome for the business.