22 Mar 2013

Delays costly for Postie Plus

3:23 pm on 22 March 2013

Clothing retailer Postie Plus has reported a half-year loss following a serious disruption to its distribution chain holding up inventory getting to its stores.

The listed company lost $2.6 million for the six months to the beginning of February this year, compared with a loss of nearly $1 million for the same period a year ago.

Postie Plus had a bad start to its financial year in August when the company's transition from Christchurch to Auckland didn't go to plan and stock didn't reach stores on time.

It says the delayed delivery meant essential early season sales were missed and it subsequently had to clear stock at a reduced margin.

Revenue fell, while the cost of goods rose, resulting in a 6% fall in gross profit to $23.3 million.

Postie Plus says its financial position is stable, with assets of nearly $38 million, compared with liabilities of more than $22 million.

However, it is in discussions with its bankers after the continued loss of margin in its last financial year resulted in it breaching its banking commitments.

The company expects to report a full-year loss.