Restructuring costs of more than $30 million have hit New Zealand childrenswear brand Pumpkin Patch Ltd (PPL) hard.
A report form the listed company, which also operates sub-brand Charlie & Me, said that in the six months up to January 31, it incurred the heavy costs after closing its under-performing British and American stores.
Restructuring costs aside it made a profit of $4.1 million, compared to a profit of $8 million a year earlier.
Revenue rose 17 per cent to $161 million, driven by a 12 per cent increase in Australasian retail sales and a 32 per cent increase in wholesale and franchise sales.
In January the company announced that following an extensive review of the UK retail operation it had appointed administrators to the UK subsidiary company.
PPL's chief executive officer, Neil Cowie, said the return on investment from the operation had not been 'acceptable' and the worsening trading environment meant higher levels of trading losses were expected to come for some time.
“The company has explored possible opportunities with potential partners in the UK, however nothing substantive has eventuated to date,” Cowie said. “Until longer term brand strategies are finalised for the market, the company is increasing its online activity and utilising its extensive customer database to target existing retail customers who can no longer purchase direct from the stores.”
Cowie said he is pleased with the progress the company has made in reorganising the business and said that online sales had increased by more than 50 per cent.