Childrenswear retailer Pumpkin Patch’s annual loss has widened by 71 per cent in the year ending July 31, with sales falling 11 per cent, which the company attributed to store closures and its ailing international wholesale business.
Pumpkin Patch posted a net loss of $15.54 million in the 12 months ending July 31, from the $9.07 million the previous year.
The company’s revenues fell 11 per cent to $212.4 million and adjusted earnings before interest, taxation, depreciation and amortisation dropped 71 per cent to $3.4 million. The company’s debt to lender ANZ Bank in New Zealand has gone up to $46 million from the $39.1 million the previous period.
Luke Bunt, the company’s managing director, said there were a number of factors that caused the decline in sales and earnings including store closures and currency effects, but, he said, the main factor was a decline in the international wholesale business and related hemisphere online channels, which, according to him, were important profit contributors previously.
Bunt said that although it is not yet apparent, considering their results, the board and management team set out at the beginning of the 2016 financial year to develop and execute a strategy that was appropriate to the circumstances of the business, by leveraging its strengths, core capability and competitive advantage.
“The goal was, and remains, to give the company the best possible chance of a successful turnaround,” he said.
He stated the 12 months to July 31 has been a major change for the Auckland-based retailer and represents the end of the first year of what has been signalled as a four-year turnaround period.
“We believe, reflecting on the underlying improvements made during the year, that very good progress has been achieved although this is not immediately apparent from the headline numbers reported,” Bunt said.
The company reported for the eight weeks ending September 2016, same store sales in Australia and New Zealand saw a 5.8 per cent and 5.4 per cent increase respectively. Online sales went up 69.8 per cent and 83.4 per cent respectively.
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