Shareholders unlikely to get anything after retail chain put into administration: expert.
The administrators of Postie Plus say they are talking to potential buyers for the clothing retailer, but a sharebroker reckons "poor and suffering" stockholders could end up with nothing to show for their investment.
The Auckland-based company, which operates 82 stores, said yesterday that the BNZ had withdrawn support amid ongoing trading losses. Postie Plus has appointed David Bridgman and Colin McCloy, of PwC, as administrators.
The retailer's board has been trying to sell the business or attract a new cornerstone investor. However, a suitor with the capability to inject "substantial new capital" had not been found, said chairman Richard Punter.
The stores continue to trade while the administrators work to secure a buyer.
The retailer's losses swelled to $3.8 million in the six months to February 2 from $1.8 million in the same period a year earlier. Postie Plus had debt of $18.2 million at the start of February, but that was reduced to $12.1 million later that month after the sale of its SchoolTex school uniform business to The Warehouse Group.
The retailer operates at the budget end of the apparel sector and has been steadily losing market share.
The administrators had received expressions of interest from a number of potential buyers and if a sale did not take place the business could be restructured, McCloy said.
Grant Williamson, of sharebrokers Hamilton Hindin Greene, said yesterday's announcement came as no surprise.
"For the last few years it's all been one way and that's been downhill," Williamson said. "For poor and suffering shareholders it's unlikely there's going to be anything [left] for them."
Postie Plus shares debuted at $1.25 in the company's 2003 initial public offering but never rose above the listing price. The stock had slumped to 7.3c by Thursday, when a trading halt began, giving the firm a market capitalisation of $2.9 million. Trading was suspended yesterday.
"As a listed entity they never got any momentum and were always struggling," said Milford Asset Management executive director Brian Gaynor. "It just doesn't grab one as an exciting business."
Postie Plus reported an annual loss of $11.6 million last year after what it called "extreme difficulties" at its new, outsourced distribution centre operated by transport and logistics provider Kuehne + Nagel which resulted in stock shortages in stores.
Punter said yesterday that the company had "proper grounds" to pursue a damages claim in relation to those losses.
Postie Plus' largest shareholder is Kathmandu founder Jan Cameron, with an almost 20 per cent stake. The company has about 650 staff.