Large job losses as more Pumpkin Patch stores close

Pumpkin Patch receivers have announced more stores are closing, with up to 560 jobs lost.

Receiver Neale Jackson, of KordaMentha, says a further 68 Pumpkin Patch and Charlie & Me stores in New Zealand and Australia will close by January 31.

Two earthquake-damaged stores which were temporarily closed will not be re-opening, he says.

“We have successfully traded stores through the traditional holiday period and stock levels are now considerably reduced. The balance of stock will be consolidated in the remaining stores as the receivership enters its final phase.”

Pumpkin Patch staff are aware the business is closing down and the stores will gradually close as stock is sold, Mr Jackson says.

“They will receive holiday pay, outstanding wages and other preferential entitlements.”

Head office staff have also been given notice their employment will be coming to an end over the coming weeks.

The remaining 56 stores will close once stock is sold, through to mid-February, the receivers says.

Pumpkin Patch owes $59.5 million to ANZ Bank and at least $6.6 million to other creditors, according to the receivers’ first report, published last month.

The company has $17.6 million in assets, with $13.5 million of that from investments and $3 million in fixed assets relating to its head office and distribution centre in East Tamaki, Auckland.

An estimated $2.7 million is owed to employees under preferential claims, with 1600 staff employed across the group.

Pumpkin Patch breached banking covenants on working capital at the start of 2016, and a new agreement was signed with banker ANZ on September 22.

As a condition of this agreement, Pumpkin Patch had to come up with options to address capital constraints – but those talks fell through.

The shares were suspended on October 26 – the day receivers were appointed – having traded at 6c, valuing the retailer at $10.1 million. 

The company posted a loss of $15.5 million in the year ended July 2016.

KordaMentha announced in November it could not attract a potential buyer and it was no longer viable to trade the business.