Staff unaware of Pumpkin Patch troubles

Pumpkin Patch posted a net loss of $15.5 million in the 12 months ended July 31 from $9 million a year earlier. Photo /Nick Reed

Staff at clothing retailer Pumpkin Patch say they were unaware of the company's situation this morning after it issued a statement saying there was virtually no value left in its equity.

Shares in the NZX-listed company were placed in a trading halt, pending a further announcement after discussions with its bank were unsuccessful.

Pumpkin Patch's future is in doubt, but staff at the Ponsonby and Westgate branches were unaware of the this, with two of the staff on their first day in the job.

"I haven't heard anything, we didn't know anything about it," said the Ponsonby manager.

"My store manager in Westgate had no idea either - she's training some new casuals at the moment," she said. "Does that mean we're going to lose our jobs?"

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The value of Pumpkin Patch shares has fallen 49 per cent in the last 12 months. Pumpkin Patch shares were the biggest decliner on the NZX yesterday, dropping 16.6 per cent to 6c per share as the deadline loomed for directors to propose measures to address its capital constraints.

It now has a market value of just $10.1 million. Its debt to lender ANZ Bank rose to $46 million from $39.1m in the year to the end of July 2016. It posted a loss of $15.5m in the same period.

At its peak in 2007 it was worth $4.95 a share - more $800 million.

"This further work coupled with discussions with the bank and certain key stakeholders has generated substantial uncertainty, which remains ongoing, regarding the company's future in the context of its current financing arrangements," Pumpkin Patch said in a statement to the NZX.

"Shareholders should note that it is highly unlikely that there is any residual value in the company's equity."

The company expects to complete "further work and discussions with relevant stakeholders" in the next few days and will announce that to the market when an outcome is clear, it said.

Last month directors said the 2016 financial year was the first in a four-year turnaround plan, and "very good progress has been achieved, although this is not immediately apparent from the headline numbers reported".

The company told investors that its directors had given an undertaking to the bank that it would put forward proposals by yesterday, although this was later pushed out to October 31.

The capital constraints in its accounts were highlighted as a "material risk" to the ongoing viability of the business.

- with BusinessDesk