What caused the demise of Wild Pair, Dick Smith and Pumpkin Patch? A post-mortem analysis

  • News
  • November 3, 2016
  • Elly Strang
What caused the demise of Wild Pair, Dick Smith and Pumpkin Patch? A post-mortem analysis

Pumpkin Patch went into receivership last week and has confirmed seven stores acrossing the country will be closing, including Ponsonby, Takpauna, Henderson, Te Rapa, Wanganui, Coastlands (Charlie & Me) and Hornby.

KordaMentha Receiver Brendon Gibson said that the stores must be closed in order to stabilise the business.

“We acknowledge this is a difficult time for all Pumpkin Patch employees. Staff have been advised of their store closure and the receivers’ intention to pay all entitlements to a maximum of $22,160 (gross) per employee. They have also been given access to EAP support services,” he said.

The seven stores will close by 8 November, with 57 staff losing their jobs.

However, the receivers still want to keep some of its New Zealand stores and its Australian stores in operation as it tries to track down a buyer.

Gibson said its Australian operations were still under review, with no store closures yet confirmed.

Was it something contagious?

Pumpkin Patch’s demise isn’t an isolated incident, as a long list of New Zealand retailers have felt the effects of a volatile marketplace before it.

Wild Pair, Shanton, Jean Jones, Identity, Cooper Watkinson, Temt, Valleygirl, Laura Ashley, Nicholas Jermyn and Dick Smith all have battled problems in the changing retail landscape and disappeared from it.

All of the businesses vary slightly in what they sell, but is there a common thread connecting them that other retailers can learn from?

Retail advisory and restructuring firm McGrathNicol recently acted as administrators of Dick Smith, Wild Pair and Valleygirl and Temt.

In an opinion piece, McGrathNicol partner Conor McElhinney said there was a number of themes he had observed that were common between the retailers that had gone into receivership, including:

  • A lack of basic retail business metrics to manage the business.
  • Being locked into unprofitable stores with no easy exit from leases.
  • An inability to compete effectively on price and range with overseas based online retailers.
  • An inability to respond quickly to the changes in fashion and supply chain mismanagement.

First Retail managing director and retail analyst Chris Wilkinson agreed that there were several common denominators between the biggest departures of the last year.

He says some of the common themes between the brands were high operating costs and legacy business models.

“One of the things that was a common denominator with all three [Wild Pair, Dick Smith and Pumpkin Patch] is that they had historic debt, or that the businesses weren’t resourced efficiently,” Wilkinson says.

“In terms of Dick Smith, it was an expensive model - they’d paid a lot of money and it owed the shareholders a lot of money, plus it had expensive sites. Pumpkin Patch again had really expensive sites, such as mall operations that would be burning a huge hole in their pocket and they were committed to those leases. As well as this, they would still dealing with debt from overseas expansion into the UK and US.”

He says the retail models all three companies were operating under wasn’t evolving fast enough with changes to the retail landscape, either.

“Pumpkin Patch was still working on seasonal releases, almost the old model of a catalogue release and that’s a very old way of doing business,” he says.

Perhaps most interestingly, Wilkinson says the problem wasn’t that their ecommerce sites weren’t up to scratch.

Instead, he says their store infrastructure was what was trapping them, which ultimately led to their departure.

“They all had an excellent ecommerce proposition - outwardly it seemed they were ticking all the boxes.

“Those three were doing extremely well in terms of their delivery online, but I think the biggest challenge there was that they just had a such a large store infrastructure that was pulling back what needed to be an evolving model.”

Uncontrollable factors

The aforementioned factors affecting the likes of Wild Pair and Dick Smith were just one of the causes of death.

This is because if a retail business is already facing hardships within its company, the current climate of retail is unforgiving.

Some of the external factors that contributed to the downfall of the Dick Smith, Wild Pair and Pumpkin Patch were wider industry trends that could affect any businesses within retail.

Wilkinson says one issue that all retailers should be keeping an eye on is that there an increasing amount of discretionary spend in retail shifting into hospitality.

This is part of the experiential spending trend where consumers are investing their dollars into experiences instead of material goods.

Another area of concern is that spending online overseas increases month on month, Wilkinson says.

This is despite whether the New Zealand dollar is for or against the consumer.  

“That’s suggesting there’s a constant appetite from New Zealand for something different, something unique. It’s not necessarily a value thing, but it does come down to the fact that is such a global market now,” he says.  

Wilkinson says businesses in Australasia need to be staying aware of global trends and looking at the wider market, and picking out where the successes and challenges are.

“Really smart retailers look at all the categories, such as trends that are happening in one sector earlier than others,” he says.

“We would also suggest businesses operate a risk register. No matter how big your business is, think of yourself as a big business where you have to report to a board and identify risks to remain constantly mindful of them.”

Survival outlook

However, the climate for retail going forward into 2017 isn’t all doom and gloom, either.

Wilkinson says the market is reasonably steady for Kiwi retailers as the end of this year nears.  

The writing has been on the wall for some time now for high-profile businesses that have gone under in the past year – Wild Pair, Dick Smith and Pumpkin Patch – and it was more a question of when, not if, he says.

He says other businesses in the market will fare far better so long as they continue to evolve with the market and keep tabs on what’s happening in retail globally and locally.

“There’s certainly much more confidence happening in the sector,” he says.

“Whilst there’ll always be businesses that are struggling out there, at the moment there’s some headroom for many businesses, and we’ll start to see a situation where there’s an appetite for investment, growth or re-investment within the business.”

​ ​

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.


Global recognition for instore innovation

  • Design
  • June 20, 2019
  • Courtney Devereux
Global recognition for instore innovation

The Global Innovation Awards (GIA) program was created by the IHA and International Home + Housewares Show to foster innovation and excellence in home and housewares retailing throughout the world. This year saw 30 national winners from 29 countries. The competition is structured on a two-tier level, evaluating national and global retailers across the following metrics: Overall mission statement, vision and strategy, store design and layout, visual merchandising, displays and window displays, marketing, advertising and promotions, customer service and staff training, innovation.

Read more

Trends analysed at Chicago's International Home + Housewares Show

Each new year for retailers is another question mark in guessing what to present to consumers. Luckily in the world of retail, trade shows can ...


Shoptalk 2019: The city of lights delivers

Juanita Neville-Te Rito shares a sprinkle of retail magic from Las Vegas retail conference Shoptalk.


Social scoreboard

Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

Regional rollercoaster
What does retail look like in 2019 for ...
Concept to closet
Business coverage of New Zealand Fashion Week.
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
The future is bright
We spoke with four retailers in their twenties ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
How to open a store
Sarah Dunn considers what it would take to ...
All things to all people
Kiwi retailers share their omnichannel strategies.
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...

Consumer confidence falls again, but still optimistic

  • News
  • June 20, 2019
  • Radio New Zealand
Consumer confidence falls again, but still optimistic

Consumers remain downbeat about the future of the economy, but are more upbeat about their own financial situations.

Read more

Automation will help retailers focus on customers

  • News
  • June 19, 2019
  • The Register team
Automation will help retailers focus on customers

More than 100 retailers have gathered at Freedom Furniture’s new Newmarket flagship to consider what the upcoming wave of automation technology offers for the industry. Speakers included Pier Smulders from Alibaba Group and Soul Machines’ Hilary O’Connor.

Read more

A guide to the four favourite business f***-ups I've made

  • Opinion
  • June 18, 2019
  • Wendy Thompson
A guide to the four favourite business f***-ups I've made

Wendy Thompson is the founder and CEO of the successful social media marketing agency Socialites, and has 16 years digital marketing experience in some of New Zealand's top advertising agencies. However. that doesn't mean she hasn't made her fair share of mistakes in her career. Here, in her typically colourful way, she shares four mistakes she's learnt from all her years in business – and the important lessons she learnt from them.

Read more
Next page
Results for
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

The Register

Content marketing/advertising? Email or call 022 639 3004

View Media Kit