After the closure of seven stores in New Zealand, Pumpkin Patch’s receivers have announced they’re going to close 27 stores across the Tasman. KordaMentha receivers said the decision to shut down the stores was made to stabilise the wider business and improve the prospects of the chain finding a buyer. Plus: we look at the most likely buyers for the chain.rn
A total of 52 employees will be redistributed to other Pumpkin Patch stores, while up to 145 people will lose their jobs.
Receiver Brendon Gibson said the closures were necessary in order to ensure the best outcome for the business.
“We have already moved to close some stores in New Zealand. Having now had time to assess the financial viability of the Australian retail footprint, unfortunately it is necessary to also close some stores in an effort to stabilise the broader business,” he said.
“Staff have been advised of their store closure and the receivers’ intention to pay all entitlements.”
Pumpkin Patch has about 1000 staff based in Australia and 600 staff based in New Zealand.
Its Australian stores will close by November 15, while the seven New Zealand stores slated to be closed will do so by November 8.
Meanwhile, Gibson said the receivers were continuing to look at sales options for the business.
He said plans to shut down stores had been accelerated “in an effort to improve saleability and viability” with potential buyers.
Last year, the retailer turned down a number of parties who were interested in buying the business.
At the time, they said the offers weren’t convincing enough to be taken seriously.
McGrathNicol administrator Joseph Hayes told a creditors’ meeting on Monday that the hunt for a buyer was still underway.
“The receivers are seeking expressions of interest to have the business sold in the coming days. We have no details on that but I know they are doing everything to get good value,” Hayes said.
First Retail managing director and retail analyst Chris Wilkinson said the situation Pumpkin Patch is now in suggests there’s not many options left to go forward with, so it’s now up to the market to decide what the brand is worth.
He said one possibility for a buyer is that Pumpkin Patch could live on as a brand within a wider brand, such as within a department store.
“It could be a department store group that would see this as a good brand to be added to their stable. Either way, whoever buys it will be able to pick the whole package up for a fairly good amount I’d suggest.”
He said the stores that remain open will most likely be popular with consumers during this time, seeing as they’ll have a lot of stock to move.
“When people know a business is in its final throes, you can get rid of a lot of stock over a short amount of time because people are driven by scarcity value and bargains,” he said.
See more coverage of the Pumpkin Patch receivership: