No buyer found for Pumpkin Patch; stores will close
No buyer has been found for Pumpkin Patch and the childrenswear business will be wound up.
Receiver KordaMentha, appointed on October 26, says it could not attract a potential buyer and it is no longer viable to trade the business.
KordaMentha partner Brendon Gibson says, without a serious expression of interest received, there is no choice but to sell all stock and wind down the business.
“Our focus since Pumpkin Patch entered receivership in October was to sell the business as a going concern. Unfortunately, while the brand is attractive, the business itself ultimately drew no interest at the conclusion of the sale process.”
The receivers will sell off all stock and begin to wind down the business, he says.
“This decision has not been made lightly and we acknowledge it will come as a blow to staff.”
Sixty-three jobs will be lost at the head office this week. These staff will receive holiday pay and outstanding wages.
All stock will go on sale from this weekend, and gift vouchers will be honoured until all stock is gone.
“It is too early to say when individual stores will close,” Mr Gibson says. “Our current intention is for all stores to remain trading until the end of the year with some continuing on into January as stock diminishes. The liquidation process will likely take until the end of February to complete.”
He says there has been interest in the Pumpkin Patch brand and receivers will try to get the best value for that.
Pumpkin Patch breached banking covenants on working capital at the start of 2016, and a new agreement was signed with banker ANZ on September 22.
As a condition of this agreement, Pumpkin Patch had to come up with options to address capital constraints – but these talks fell through.
It owes $46 million to ANZ, which tipped it into receivership in a bid to claw back some cash.
Pumpkin Patch’s loss widened 71% to $15.5 million in the year to July 31, as revenue dropped 11% to $212.4 million, and adjusted earnings before interest, taxation, amortisation and depreciation fell 71% to $3.4 million.
Earnings suffered after a loss of international wholesale accounts and related northern hemisphere online channels.
The 26-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.
The shares have been in a trading halt since October 21, and last traded at 6c, valuing the retailer at $10.1 million.