Amid continuing reports of financial strife, listed New Zealand childrenswear retailer Pumpkin Patch has quietly celebrated its 25th birthday. We looked at how it got to this point.
Pumpkin Patch was founded in 1990, when founder Sally Synnott spotted a gap in the market for quality, fashionable childrenswear. A former childrenswear buyer and mum, she was able to build a strong brand right from the beginning. Her mail order catalogue was so popular that Pumpkin Patch’s first retail store soon followed.
By 1994, Pumpkin Patch had headed into Australia as a mail order catalogue, opening its first Australian store three years later. Pumpkin Patch adapted to ecommerce in 2001, launching a transactional website to service its Australasian markets.
Pumpkin Patch’s rise seemed unstoppable in the early 2000s. It scored its first US wholesale partner, Nordstrom, in 2002, adding Australian department store David Jones to the stable in 2003. During 2004 it listed on the stock exchange, opening franchise partner stores across the Middle East in the same year. Retail stores in the US, franchises in Singapore, Malaysia, Indonesia, South Africa and Pakistan followed, along with the company’s first ecommerce website in 2006.
In 2007, however, Pumpkin Patch’s shares peaked. In January of that year, PPL stocks were worth $4.95 – by this November, they had dropped by 98 percent to $0.115. The highest peak Pumpkin Patch saw in 2015 was in March, when the company revealed third parties had expressed an interest in buying it, but these gains were lost when the search for a buyer was abandoned in June.
As of 2015, the company has closed its bricks and mortar stores in nearly all international markets, with just 176 stores remaining across Australia, New Zealand and Ireland. The last annual report notes the loss of wholesale accounts in the northern hemisphere, not to mention a dropoff of online sales across the US and UK.
The news isn’t all bad. Pumpkin Patch delivered a worse-than-expected $9.1 million after-tax loss for the year to July 31, but it has also reduced net banking debt by $20 million, and its banking facilities are secure until the end of 2017.
Pumpkin Patch continues to focus on closing underperforming stores, but the core retail businesses in New Zealand and Australia have performed well in the face of a highly competitive and promotionally driven market, says company chair Peter Schuyt, and progress has been made in improving stock efficiency.
Pumpkin Patch also has a new managing director, Luke Bunt. Bunt came to Pumpkin Patch from a role as chief financial officer of The Warehouse Group. Pumpkin Patch’s former CEO Di Humphries tendered her resignation in June.
It would be a stretch to call Bunt’s statement in the last annual report optimistic, but it’s clear he has a plan:
“The review has underscored that Pumpkin Patch’s focus must come back to its customers, the style of clothes they want to buy for their kids, the experience they want to enjoy in our stores and how they want to communicate and engage with us.
“To achieve this, investment will be required in product design, all our channels to market and on various customer communication mediums.”
With luck, Pumpkin Patch may be able to regain its former glory.
This story originally appeared in NZRetail magazine issue 741 December 2015 / January 2016