Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Discounting makes Pumpkin Patch wary of Christmas trading

Pumpkin Patch wary of Christmas trading as retailers keep discounting

By Paul McBeth

Nov. 20 (BusinessDesk) - Pumpkin Patch, the children's clothing chain that closed underperforming stores in the US and UK this year, is wary of the upcoming Christmas trading period as the environment stays tough and retailers continue to discount their wares to attract bargain-hungry customers.

Chief executive Neil Cowie told shareholders the tough trading conditions from the 2012 financial year have carried over into the new period and he doesn't expect that will "materially improve" in the short-term.

"Promotional activity remains higher than normal as all retailers attempt to spark life into customers, but as a result, margins are impacted," Cowie said in annual meeting speech notes published on the NZX. "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."

Pumpkin Patch has been shifting its distribution focus to online channels and away from physical outlets to keep a lid on costs, after it overhauled its structure this year, taking a $39 million charge to do so.

Cowie said the retailer has based its entire distribution operation out of Auckland and can beat delivery by local online businesses competing in its eight international markets. About 11 percent of Pumpkin Patch's Australasian sales were online in the 2012 year.

"This gives us a great platform on which to base the significant growth we are expecting from online in the future," He said.

Pumpkin Patch's international partners unit, which develops and supports relationships with third-party operators who sell the company's products, is looking at new ventures in the Middle East, Central America and Asia, though Cowie said he wasn't able to elaborate.

Chair Jane Freeman told shareholders the board will review its freeze on dividend payments at the end of the first half, but backs repaying bank debt before doing so.

Pumpkin Patch is looking at allocating shares to Cowie and his team under the existing long-term incentive scheme, and shareholders will receive a letter about the plan in the coming days, she said.

"The allocation creates a long-term retention tool and an incentive for the team to continue with the development of strategies that will drive improved shareholder value into the future," Freeman said.

The shares were unchanged at $1.25 in trading today, and have jumped 94 percent this year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Revenue Renewal: Tax Modernisation Programme Launched

Revenue Minister Todd McClay today released the first two in a series of public consultations designed to modernise and simplify the tax system. More>>

ALSO:

Scoop Business:
NZ Puts Seven New Oil And Gas Areas Put Up For Tender

A total of seven new areas will be opened up to oil and gas exploration under its block offer tendering system, as the New Zealand government seeks to concentrate activity in a few strategically chosen areas. More>>

ALSO:

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news