Markets are unlikely to improve after last year's difficult conditions, and returns will continue to be volatile, children's clothing company Pumpkin Patch told shareholders at its annual meeting today.Pumpkin Patch saw annual net profit rise 76 percent t
Markets are unlikely to improve after last year's difficult conditions, and returns will continue to be volatile, children's clothing company Pumpkin Patch told shareholders at its annual meeting today.
Pumpkin Patch saw annual net profit rise 76 percent to $25.5 million last year despite a decline in revenue, thanks to a focus on inventory, margin, and managing costs, and a restructuring.
However, the global recession -- particularly in the United States and United Kingdom -- was far from over, and was exacerbated by a strong currency and weak Australasian customer confidence, chief executive Maurice Prendergast said.
"At present, it is extremely difficult for all retailers to gauge what is happening to customer spending. With five retail markets, 22 wholesale markets and a considerable direct business this is even more of a challenge."
The first three months of the new financial year had been very difficult in Australia, with a lot of promotional work required to generate sales.
In New Zealand the trading outlook remained tough. Pumpkin Patch was unlikely to expand further in the United States this year, although it planned to open its first store in China.
Trading for the new "everyday wear" store Charlie and Me had met expectations so far.
The company had decided to implement a five-year plan focusing on the long term, accepting that short-term profits may fluctuate, Mr Prendergast said.
The focus was on further expanding the Pumpkin Patch brand internationally, developing wholesale markets, particularly Asia, rolling out Charlie and Me stores, and building on its retail infrastructure in Australasia.
Former Hanover Finance chairman Greg Muir had decided not to seek re-election as a director after some influential shareholders wanted him removed from the board because of his role with failed finance company Hanover.
Mr Muir has been chairman of Pumpkin Patch since it listed in 2004, to assist the company in its listing on the New Zealand Stock Exchange and to lead the wholesale division through its early growth phase.
He was appointed chairman of Hanover in December 2005 and resigned in October 2008.
Shares in Pumpkin Patch closed down 2c at $1.80 in a weaker market.
