28 Sep 2011

Pumpkin Patch plans expansion via wholesale partners

7:17 am on 28 September 2011

Loss-making children's clothing retailer Pumpkin Patch says it's considering launching into new markets, including Mexico, through wholesale partners.

Shares in the company plunged 10% on Tuesday after it announced a $1.8 million loss in the year to July.

The loss is mainly due to the one-off $15.6 million cost of closing all its US stores and reviewing its struggling UK business.

Pumpkin Patch's Australasian stores remain profitable, but sales fell 7% to $357 million and weaker demand and higher costs crimped earnings.

Outgoing chief executive Maurice Prendergast says there's still room to expand into other markets, though it will be through wholesale partners rather than opening its own stores.

Mexico is a massive market for children's clothes, he says, and the company already has a brand presence from people shopping in its stores across the border in the United States.

Mr Prendergast says the retailing environment will continue to be tough in 2012 and will be on par with this year.

Maurice Prendergast is stepping down as chief executive at the end of the year but will remain on the board.

The company's shares fell 9 cents to 80 cents on Tuesday.