More than 1600 jobs at kids retailer Pumpkin Patch will go by February after the retailer's receiver failed to secure a buyer for the chain and announced the immediate loss of more than 60 head office jobs in Auckland.
Pumpkin Patch prices will be slashed immediately as receiver Korda Mentha works to claw back as much as it can from the brand's inventory before the shutters start to come down from December.
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Pumpkin Patch fails to secure buyer
Children's clothing retailer Pumpkin Patch announces it will close after receivers fail to find a buyer. Vision courtesy ABC News 24.
The fire sale will run until February in some stores, however, Korda Mentha said it was too early to say when individual stores would close across Australia and New Zealand.
Receiver Brendon Gibson said all stores would remain open until the end of December but the restructuring of Pumpkin Patch's head office would occur immediately, resulting in the loss of 63 jobs this week.
"Our focus since Pumpkin Patch entered receivership in October was to sell the business as a going concern," Mr Gibson said.
"Unfortunately, while the brand is attractive, the business itself ultimately drew no interest at the conclusion of the sale process.
"We now move to the next phase of the receivership, which is to sell off stock and begin winding down the business."
In late October, Pumpkin Patch's management said the was virtually no value left after discussions with its lender, ANZ Bank New Zealand, faltered.
![About 1000 staff work in Pumpkin Patch's network of 117 stores in Australia, and about 600 in its 43 New Zealand outlets.](/web/20161122112153im_/http://www.smh.com.au/content/dam/images/1/2/r/w/2/u/image.related.articleLeadwide.620x349.gsuolr.png/1479786120763.jpg)
In a statement at the time, chairman Peter Schuyt and managing director Luke Bunt said despite the efforts of the board and management, it had become evident that "no solution" was available to the company to address its "over-leveraged and significantly capital constrained position".
Pumpkin Patch posted a full-year loss of $15.5 million for fiscal 2016, during which time its debt to lender ANZ increased to $46 million from $39.1 million.
![Pumpkin Patch prices will be slashed immediately as receiver Korda Mentha works to claw back as much as it can from the ...](/web/20161122112153im_/http://www.smh.com.au/content/dam/images/g/s/u/t/m/j/image.related.articleLeadwide.620x349.gsuolr.png/1479786120763.jpg)
About 1000 staff work in Pumpkin Patch's network of 117 stores in Australia, and about 600 in its 43 New Zealand outlets.
Pumpkin Patch trades in the cut-throat mid-range market and retail consultant Brian Walker said Pumpkin Patch got caught in competition with successful discount operators like Kmart, which could produce similar lines at a lower price point.
"It just got caught by the discount department stores with a selection of products that didn't have a clear point of difference," Mr Walker said.
"It was always just too easy to copy and when you look at the growth of [Wesfarmers'] Kmart, Pumpkin Patch's product is the fodder of the discount operators."
Mr Walker said Pumpkin Patch also expanded rapidly, growing too quickly in the fiercely competitive mid-market.
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