Childrenswear brand Pumpkin Patch has changed hands for the second time in as many years, becoming the latest business to be brought under the umbrella of investment firm Alceon Group amid a spate of consolidation in the fashion industry.
Alceon, which in recent years has involved itself in the purchase of a number of retail assets, including Ezibuy, Surfstitch and the Katies, Crossroads, Autograph and Rivers businesses, will relaunch Pumpkin Patch by the end of October.
It has bought the business from online retailer Catch Group, which rescued Pumpkin Patch’s intellectual property from receivers in 2017 and proceeded to trade the brand online.
The deal will see Pumpkin Patch make a return to physical retail as stock in Ezibuy stores in New Zealand, ahead of a planned full relaunch in July next year. The purchase price was not disclosed.
“The Pumpkin Patch brand has a strong recognition in both Australia and New Zealand and its products are highly respected in the children’s wear markets,” Alceon executive director and Noni B Group chairman Richard Facioni said in a statement circulated on Thursday.
At its peak Pumpkin Patch had more than 150 physical stores across Australia and New Zealand and was a household name in the childrenswear category.
However, the traditionally middle-to-upper market brand ran into trouble amid the local entry of fast-fashion businesses such as Zara and H&M, alongside the resurgence of discount department store Kmart.
Catch Group reset Pumpkin Patch’s price base after purchasing the business and proceeded to use the brand as part of its burgeoning e-commerce business.
Alceon hopes to take the brand down a different path though, saying it intends to eventually open new standalone Pumpkin Patch stores in Australia and New Zealand.
Fashion empire emerges from industry pain
The venture is just the latest acquisition for Alceon, which has a track record of purchasing distressed retail assets.
Alceon took up a major stake in Noni B in 2014 and proceeded with a turnaround plan which has seen the business emerge as one of the stronger players in the subdued women’s fashion category.
Last year it bought the loss-making Ezibuy business from Woolworths and earlier this year it purchased collapsed surfwear business Surfstitch through Ezibuy.
It also helped Noni B Group raise capital to purchase Specialty Fashion Group’s struggling Katies, Crossroads, Autograph and Rivers businesses for $33 million in May, a deal which made the company one of the biggest fashion stakeholders in the country, with a store footprint of more than 1,000.
Retail expert Gary Mortimer, an associate professor at Queensland University of Technology, says Alceon is making the most of subdued retail conditions by buying distressed retailers with strong brands cheaply.
“It’s a bit opportunistic,” Mortimer tells SmartCompany.
“They’re seeing businesses that can’t operate as standalone and are buying them up relatively cheaply.”
Mortimer says Alceon will balance the books on the struggling businesses by pursuing cost savings that come with scale.
“Once you centralise all the back office operations it’s just a matter of replicating your offer.”
He says Pumpkin Patch will offer Ezibuy and Alceon a strong brand in a part of the market — childrenswear — where they previously had little to offer.
“There’s still a hunger for that middle-market value proposition, although it’s getting very crowded, so it can be very difficult to stand on your own two legs.”