Pumpkin Patch's chief executive officer has announced his resignation - on the same day the company's year end results revealed a huge plunge in profits.
The New Zealand childrenswear brand, which has more than 200 stores across Australia, New Zealand the UK and the USA, along with wholesale operations in 14 countries, has released its annual report for the year ending July 31 2011.
The company's net profit after tax (NPAT), before non-recurring items, decreased by more than 50 per cent compared to 2010.
In the 2011 financial year its NPAT was $12,641 million, compared to $25,502 million the year before, which is a drop of 50.4 per cent.
The company's chief executive officer, Maurice Prendergast, who in a separate statement announced his resignation, said the brand will continue to hold a strong market position across Australasia, but stores will close in the USA and there will be a review of under-performing stores in the UK.
“The result reflects the very challenging retail environment and the effect of significant increases in garment costs due to cotton price escalation,” Prendergast said.
“Events such as the Christchurch earthquakes, the Queensland floods and political unrest in the Middle East added to these challenges.”
Earnings before interest and tax, excluding non-recurring items, were $21,619 million in 2011 compared to $40,117 million in 2010, which is a 46.1 per cent decrease.
“While we are naturally disappointed with the overall group result, you just have to look at the large scale store closures and restructuring plans announced by a number of the major international and Australasian apparel retailers as an indication of how tough it has been,” Prendergast said.
The board of directors has appointed Neil Cowie, the company’s current chief operating officer, as CEO designate.
Pumpkin Patch’s chairman Jane Freeman said Prendergast will remain in position until the end of the year and he is staying on as a director.
“What he has done for the business over the last 18 years is remarkable and the board wishes to acknowledge his contribution and dedication to Pumpkin Patch,” said Freeman.