Pumpkin Patch has reported a 44 per cent drop in net profit after tax for the six months to January 31, 2011.
The childrenswear company, which both wholesales and retails brands including Pumpkin Patch, Charlie & Me and Urban Angel, reported net profit after tax for the first half of 2010/11 was $8.1 million. This was down 44 per cent from $14.3 million in the previous corresponding half year.
Pumpkin Patch CEO Maurice Prendergast said the company had maintained gross margins during the six month period, despite difficult trading conditions.
“We always knew 2011 was going to be a tough year especially considering the retail softness that has developed since the early part of 2010,” Prendergast said.
“We experienced supply chain difficulties and delivery delays early in the season due to supplier factory closures and cost pressures within the supply chain. Adding to this was the extreme weather events in Australia and the United Kingdom, and a disappointing post-Christmas sale period. We certainly had plenty of challenges to deal with.”
Pumpkin Patch, which is headquartered in New Zealand, reported sales in its home country were down 12 per cent. In Australia, sales were down 14 per cent in New Zealand dollar (NZD) terms. Sales in Great Britain were down 4 per cent in NZD terms “due to the continued high exchange rates”.
The company opened 17 new stores across Australia, New Zealand, Ireland and the UK during the six months, with Prendergast reporting a more favourable leasing environment on account of soft retail conditions.
Part of the store openings included seven stores for Pumpkin Patch's newest brand, Charlie & Me.
“The initial results [for Charlie & Me] are as expected however it is still very early days in the brand's development phase with the average store being open for less than six weeks. It will be another 12 to 18 months before we make any decisions on a long term roll out plan for the brand,” Prendergast said.
He appeared confident of Pumpkin Patch's future.
“We are able to ride out the current short term trading weakness and at the same time position the company to benefit when trading conditions improve.”
Pumpkin Patch currently operates 128 stores in Australia, 52 stores in New Zealand, 42 stores in the UK and 2 stores in Ireland.