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No buyer for Pumpkin Patch, stores to shut

NZ NewswireNZ Newswire 22/11/2016 Sophie Boot

No buyers have emerged for children's clothing retailer Pumpkin Patch, meaning the company will sell all stock and be wound down, with 63 people losing their jobs this week, the receivers have announced.

All stock will go on sale this weekend, with gift vouchers to be honoured while current stock is sold.

The company was tipped into receivership by its lenders in October and appointed voluntary administrators after failing to reinvent itself in the face of shrinking sales and too much debt.

Receiver Brendon Gibson from KordaMentha said they had wanted to sell the business as a going concern but had no other option after failing to recieve any serious expression of interest.

"Unfortunately, while the brand is still attractive, the business itself ultimately drew no interest at the conclusion of the sale process," Gibson said.

"This decision has not been made lightly and we acknowledge it will come as a blow to staff."

The receivers said they had received interest for the value of the Pumpkin Patch brand and will now "run a process to optimise the value of that asset."

In its full-year results published in September, Pumpkin Patch told investors its directors had given an undertaking to the bank that it would put forward proposals by Oct. 20, which was later pushed out to Oct. 31.

The capital constraints were highlighted in the accounts as a "material risk" to the ongoing viability of the business.

Pumpkin Patch's debt to ANZ Bank rose to $46 million from $39.1m in the year to the end of July 2016. It posted a loss of $15.5m in the same period.

All stores will remain open until at least the end of December, but 63 people have lost their jobs this week after head office restructuring, Gibson said.

"It is too early to say when individual stores will close," Gibson said.

"Our current intention is for all stores to remain trading until the end of the year with some continuing on into January as stock diminishes. The liquidation process will likely take until the end of February to complete."

The shares have been in a trading halt since Oct. 21, and last traded at 6 cents, valuing the retailer at $10.1m.

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