New Zealand-based childrenswear chain Pumpkin Patch has reported a 20 per cent fall in full-year earnings, citing “challenging retail conditions” for the tumble.
The results, for the 12 months ended July 31 2012 saw profit before one-time restructuring costs down to NZ$10.1 million for the period, from NZ$12.6 million a year earlier.
However despite this, sales for the company rose 3.1 per cent to NZ$300.1 million, while global online sales for the brand exceeded NZ$30 million.
According to Pumpkin Patch CEO Neil Cowie, global online earnings also exceeded earnings before tax and interest generated by all of the company's New Zealand retail stores combined.
“Despite the challenging environment Australian sales were up four per cent and New Zealand sales were up three per cent driven by very strong online sales growth and positive sales growth from our retail stores,” he said.
“This is a major milestone and a sign of the growth potential and scalability of our online model. Our online sales in Australia are the equivalent of around 11 per cent of our retail sales which is twice that of the average Australian retailer”.
As a result, Cowie also revealed that multi-channel strategies will be one of the key focus areas for the company going forward, with plans to roll out free in-store wi-fi for customers in 2013 and trial a number of other multi-channel options.
“The merging of the traditional retail and online models is only just beginning however we believe we are ahead of the pack and will retain that position as we continue to invest in technology and supply chain capability. The customer reaction to our new ‘click and collect’ (buy online and deliver to store) model has been way above our expectations.. so watch this space.”
Cowie also provided an update on the Pumpkin Patch international business unit and said the company is expecting increased revenue from most international markets in local currency terms in the coming year.
In addition, the company is also currently looking at a number of new international franchise and online opportunities for both the Pumpkin Patch and Charlie & Me brands.
“We are becoming a true multi-channel operator. Having a strong Australasian retail presence, a rapidly growing international online operation, and the opportunities for our international wholesale/ franchise business model gives us so much flexibility when looking at growth options. Couple this with the dual brand Pumpkin Patch/ Charlie & Me strategy and you open up a lot more opportunities,” Cowie said.
“Not withstanding current retail conditions following the reorganisation, which is now mostly complete, we are a simpler and more agile business that is much better placed to take advantage of the opportunities that exist across Australasia and our international markets. We can now look towards the future with more confidence”.