Postie Plus lost $10.8 million dollars in the year to July, in what it says is the toughest year in its history.
The retailer says most of the loss is due to goodwill and stock writedowns associated with the sale of its poorly performing Arbuckles stores to Kathmandu founder Jan Cameron.
But lower consumer spending and heavy discounting by rivals to attract shoppers also took its toll, with revenue falling 3.5% to $131 million.
Despite a tough year, Postie Plus says it is on track to benefit from group-wide savings from streamlining its retail structure and selling Arbuckles.
It expects to save $1 million a year after combining its logistics into one hub in Christchurch.