Shares in Postie Plus tumbled after the clothing retailer more than doubled its half year loss and revealed it is in talks with its banks over breaching its banking covenants.
The clothing retailer outsourced its supply chain to a purpose-built logistics and distribution centre in Mangere last year as part of its shift from Christchurch to Auckland.
The company said ongoing teething troubles with the new centre means sales are suffering and margins are being squeezed leading to a breach of its covenants.
In a statement chairman Richard Punter said the company is in discussions with its bank and its logistics and distribution supplier to try to fix the problems.
Postie Plus is expecting its first half losses to more than double to $2.6 million and to suffer a significant full year loss as a result of the distribution troubles.
The company will announce its half year results at the end of March.
Postie Plus shares had fallen 6 cents to 18 cents about midday on Friday.
