Earnings from Pumpkin Patch's online business are expected to outpace those of its New Zealand retail stores within two years, and its chief executive says the company is looking to use the internet to expand into new international markets.

The children's clothing retailer, which reported a $30 million net loss in its interim result yesterday blamed on costs related to store closures in the United States and Britain, says online sales rose 50 per cent in the six months to January 31, compared with the same period a year earlier.

Chief executive Neil Cowie, who took the helm late last year, said Pumpkin Patch had identified online as a key growth opportunity two years ago and internet sales now made up about 13 per cent of total revenue.

The company is forecasting online revenue to exceed $30 million in its current full financial year.


Cowie said Pumpkin Patch used its database of four million customers to target its electronic marketing and drive its sales on the web.

The retailer was already moving into the next phase of its online strategy - introducing so-called "click and collect", which allowed customers to purchase items on the web and then pick them up from a physical store, he said.

Pumpkin Patch has websites operating in New Zealand, Australia, Britain, the US and Ireland. Cowie said the company was considering expanding into "appropriate" additional online markets, including Canada.

Meanwhile, with store closures in Britain and the US completed, he said that although the retail outlook in Australasia remained challenging, the worst was now behind Pumpkin Patch.

Pumpkin Patch reported a 17.4 per cent rise in half-year revenue from continuing operations to $161.1 million.

Net profit from all operations, excluding reorganisation costs, fell 48.3 per cent on the same period a year earlier to $4.2 million.

The company said improved stock management processes and strong Christmas sales resulted in a 14 per cent increase in Australian revenue to $98.4 million.

In New Zealand, sales increased 7 per cent to $28.8 million during the half-year, Pumpkin Patch said.

The company has entered new wholesale partnerships in Mexico and the Middle East and total sales for wholesale and online rose 43 per cent on last year to $34 million.

Pumpkin Patch shares rose 5.8 per cent to 9c, having shed more than a third of their value in the past 12 months.