Pumpkin Patch pulls back overseas store ownership
Listed children's clothing retailer Pumpkin Patch has no plans for any new stores globally and will instead focus on growing online sales and expanding its wholesale and franchise models.
CEO Neil Cowie told shareholders at today's annual meeting in Auckland that it would carefully assess opportunities in China but its favoured option would be to establish partnerships as it had done in 22 other countries.
New Zealand, Australia and Ireland remain the only countries with company-owned retail outlets.
In September, the company reported a net loss for the year of $27.5 million.
The loss factored in almost $40m of reorganisation costs relating to the closure of under-performing stores in the United States and United Kingdom, plus changes to head office functions and management structures.
Net profit excluding the reorganisation costs was $10.1m, ahead of an analyst's forecast of $9.7m but still down 20.3 per cent on the prior year's $12.6m.
Its online channel now comprises 11 per cent of total revenue and it also has partnerships with firms such as global online retailer Amazon.
Pumpkin Patch was no longer a simple New Zealand retail company, Cowie said.
"Combining our retail, online, and wholesale/ franchise models we are selling Pumpkin Patch and Charlie & Me product in some very diverse markets around the world," he said.
"The investment we have made in building our internal capabilities and the three different distribution models allows us to look at a map of the world and see a huge number of new market opportunities for our brands."
As in past years, the company did not provide earnings guidance as it was "far too early in the financial year", especially with existing global market volatility, he said.
The softer conditions the company experienced in 2012 had continued in this financial year.
"We currently don't see anything that would indicate that these conditions will materially improve in the short term," he said.
Promotional activity remained higher than normal as all retailers attempted to spark life into customers, but that was impacting retailers' profits, Cowie said.
"Our main focus right now is ensuring we enter the all important Christmas trading period in the best possible position," he said.
"The general consensus out there is that Christmas will be challenging so for that reason my primary focus is making sure we pull every trick out of the hat to maximise sales opportunities.''