ANZ Bank is unlikely to see all the millions it lent failed childrenswear company Pumpkin Patch, and unsecured creditors probably won’t get a cent.
The bank was owed $59.5 million when Pumpkin Patch went into receivership in October 2016.
The latest six-monthly report from receivers Brendon Gibson and Neale Jackson of KordaMentha shows at the end of April, ANZ had been paid $29.4m.
The receivers say given all the group’s assets have been realised, there will be a shortfall to the bank, which is still owed $19.8m (including accrued interest).
Pumpkin Patch’s preferential creditors have been paid $2.9m, including $2.7m owed to employees and $154,000 owed to Inland Revenue.
The company’s largest trading subsidiary, Pumpkin Patch Originals, has paid preferential creditors $1.9m, including $1.46m to employees, $438,000 to NZ Customs, and $48,000 for PAYE tax and other deductions.
Receivers say all preferential claims have now been paid but there are no funds to pay unsecured creditors. The liquidator is still assessing the unsecured claims.
The 27-year-old retailer listed in 2004 and enjoyed years of success before competitive pressures got the better of it amid uncertain global economics.
It endured a rough few years after its ambitious overseas expansion misfired, leaving a huge debt burden.
This wasn’t helped by the fact it paid dividends that were 97% of the company’s net profit over the expansion period, with a lack of reinvestment in the core business.
Pumpkin Patch’s own research showed its products were not meeting customer needs, with falling quality and design, high price perception, and product range issues.
The retailer also had poor merchandise planning and inventory management but didn’t have the necessary capital ($8 million) to invest.
ANZ pushed it into receivership after options, including a capital raise, equity injection, equity or asset sale or acquisition of the group, failed to pan out.
The company's brand and intellectual property were sold to Australian online retailer Catch Group in March last year.
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