Shareholders of struggling national clothing retailer Postie Plus have approved the company's plan to sell its school uniform business, but not without first grilling the board.
At today's annual meeting in Christchurch, shareholders fired off questions about selling for $9 million, a profitable business that brought in about $11 million of revenues a year.
Chief executive Richard Binns said the company was reluctant to sell SchoolTex, but needed to reduce bank debt.
''Under normal circumstances, we wouldn't want to sell SchoolTex,'' he said.
The sale would help Postie reduce its debt from $21.1m to $12.2m.
Binns said the move would allow the company to focus on its core business recovery, and plans were in place to make up for the lost sales.
A shareholder said SchoolTex was part of the heritage of the brand, and brought in customers.
Another shareholder attacked the board saying he was concerned about the company's future.
Postie chairman Richard Punter said: ''We're reluctant sellers, but we have to sell it.''
A long-time shareholder said he was concerned too.
''The share was 70 cents when I came in to the company, and now it's down to 8c,'' he said.
''I don't see positive things happening with Postie Plus . . . I don't see nothing positive at all.''
He said he was worried the company would be taken over.
Punter said a takeover was always a risk with the position Postie Plus was in but the company needed to reduce bank debt to move forward.
Another shareholder asked what steps the company planned to take to reduce the remaining $12m debt ''to a more manageable figure''.
Punter replied: ''We certainly need some more capital in the company. We have the support of the bank at the moment and we hope to make further announcements about that in the next week."
'Punter would not say any more until the official announcement.
Postie Plus's first-quarter sales have dropped 14 per cent compared with the same period last year, and it recorded a loss of $13.2m last month for the year to August.
The clothing retailer's sales for the first three months of trading to October 2013 were down $2.7 million to just under $16m.
Binns said the drop was a knock-on from distribution issues the company faced late last year and early this year, and the company was still suffering from its loss of market share earlier in the year.Postie shares last traded at 8.2 cents, down 64 per cent compared to last year.
- Fairfax Media