Pumpkin Patch receivers to close seven NZ stores, laying off 57 staff
The receivers of failed retail chain Pumpkin Patch will close seven stores over the next week and a half with 57 staff to lose their jobs.
KordaMentha's Neale Jackson and Brendon Gibson were appointed by the retailer's lender – ANZ Bank New Zealand – on Wednesday after Pumpkin Patch failed to convince the bank to let it keep trading, and immediately signalled store closures and job losses were likely. The receiver today said stores in Ponsonby, Takapuna, Henderson, Te Rapa, Wanganui, Hornby and a Charlie's & Me site at Coastlands will be shut by November 8, with 57 jobs lost.
"Unfortunately, having now had time to assess these stores' financial viability, it is necessary to close them in an effort to stabilise the broader business," Mr Gibson said in a statement. "Staff have been advised of their store closure and the receivers' intention to pay all entitlements to a maximum of $22,160 (gross) per employee. They have also been given access to EAP (employee assistance programme) support services."
Earlier this week Gibson said Pumpkin Patch's existing plans to shut down some outlets would be accelerated "in an effort to improve saleability and viability" which would likely lead to job losses among the 600 New Zealand staff and 1000 Australian employees.The receivers want to keep the retailer operating as they hunt for a buyer.
Mr Gibson today said the Australian operations were still under review and no closures have been confirmed.
In its full-year results published last month, Pumpkin Patch told investors its directors had given an undertaking to the bank that it would put forward proposals by October 20, which was later pushed out to October 31. The capital constraints were highlighted in the accounts as a "material risk" to the viability of the business. Pumpkin Patch's debt to ANZ Bank rose to $46 million from $39.1 million in the year to the end of July 2016. It posted a loss of $15.5 million in the same period.
Last year the retailer spurned a number of parties interested in buying the business, saying at the time that the offers weren't compelling enough for the board to consider seriously. Instead, it tried to lift its trading performance in a four-year turnaround programme, which it claimed was starting to show improvements.