Pumpkin Patch to close 27 Australian stores as receivership continues: Who are the likely buyers?
Tuesday, November 8, 2016/
Twenty-seven Pumpkin Patch and Charlie & Me retail stores in Australia will close their doors by the November 15, as Pumpkin Patch’s receivers continue to seek a buyer for the cross-Tasman retail chain.
At the time of the retailer’s collapse, it was operating 117 stores in Australia. However, KordaMentha said late last week 27 of those outlets would close by mid-November.
Among the Pumpkin Patch-branded stores to close are those located in Bendigo, Frankston, Shepparton and Docklands in Victoria, Rundle Mall in Adelaide, and Orange, Wagga Wagga and Chatswood Chase in New South Wales.
The Charlie & Me stores that will close are located in Booragoon, Carousel and Chatswood Chase. A full list of the closing locations is available here.
KordaMentha said the store closures mean 145 jobs will be lost, while another 52 employees will be redeployed to work in other Pumpkin Patch stores. All entitlements for Australian employees are expected to be paid.
Receiver Brendon Gibson previously told SmartCompany the receivers would “be looking at accelerating” store closures that were already planned prior to their appointment.
“We have already moved to close some stores in New Zealand,” he said in a statement on Friday.
“Having now had time to assess the financial viability of the Australian retail footprint, unfortunately it is necessary to also close some stores in an effort to stabilise the broader business.”
The first meetings of Pumpkin Patch creditors were held on Monday in Sydney and Auckland, with a second meeting of creditors for the Australian operations expected to be held after November 16, according to SBS.
Who are the likely buyers?
McGrathNicol administrator Joseph Hayes, who was appointed to the Australian operations of Pumpkin Patch with Shaun Fraser on October 26, reportedly told the Sydney creditors’ meeting that several parties have expressed interest in buying Pumpkin Patch and the receivers are “doing everything to get good value”.
Retail expert Brian Walker, chief executive of the Retail Doctor Group, told SmartCompany this morning he believes a larger retailer with an existing presence in the children’s wear market, such as Cotton On, would be a “logical” buyer for the Pumpkin Patch chain.
However, Walker says a “carve up of the best performing sites” is the more likely outcome, which would involve other specialty retailers picking up Pumpkin Patch locations, rather than the business itself.
“That would open it up to a broader playing field,” he says.
Walker sees parallels with the group of retailers in the running to pick up former Masters sites once the hardware business is closed in early December, and says this type of outcome is common in instances where a retail business runs into trouble after expanding rapidly.
In the case of Pumpkin Patch, Walker says the retailer has faced increasing competition to its product range on a number of fronts: from department stores, discount retailers, and online operators.
“The products are very easily copied … and [Pumpkin Patch] didn’t have the scale of Kmart, or Big W, or Target, or Myer and David Jones,” he says.
“Invariably, prices and margins get squeezed and it becomes untenable.”
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