21 Oct 2016

Pumpkin Patch shares worth very little, company warns

12:01 pm on 21 October 2016

The future of troubled children's clothing retailer Pumpkin Patch is hanging in the balance, as it warned shareholders there is likely little value in its shares.

no caption

Photo: 123rf

The company has been in strife after making a $20.2 million loss in the year ended July, with sales falling 11 percent to $212.4 million.

It's been relying on its banks to keep it afloat and trading, and said it's been talking with them about its options as it grapples with a big debt burden and lack of capital.

"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," the company said in a statement.

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

It said the discussions would continue over the next few days and when an outcome is clear, a decision would be disclosed to the market.

Pumpkin Patch said last month it was struggling to move forward because of a lack of money to reduce its debts and reinvest, which were material risks to its ongoing viability.

Trading in Pumpkin Patch has been suspended.

Get the new RNZ app

for ad-free news and current affairs