Pumpkin Patch

[ratkin]

Have noticed their shops are always very quiet. The writings been on the wall for a few years now

[boofters]

its the same as with HLG, big box clothes is being destroyed by online. I have seen PPL using NZSale / OZsale to sell, I can gaurentee there to be more margin in that than that awlful looking building in Albany that costs them 500,000 a year.

The 'high street' model for clothing is dead IMO.

[ratkin]

its the same as with HLG, big box clothes is being destroyed by online. I have seen PPL using NZSale / OZsale to sell, I can gaurentee there to be more margin in that than that awlful looking building in Albany that costs them 500,000 a year.

The 'high street' model for clothing is dead IMO.

Young mothers as a group are one of the highest consumers of online shopping , they home all day after all

[BlackPeter]

Have faith belg ....they still in profit ...even if it is only $106,000

And the girls did a great job hyping up the future .....

......but ruined it when the Chairman (?) insisted they add this little bit - While the company is only just entering the winter sales season, given current known factors and assuming there is no material improvement in underlying conditions, on balance the company believes there to be more downside risk than upside potential for earnings for the remainder of the year.

But the hype and potential will protect the share price ...in the 70s today methinks

Just jumped in (at 55 cents) - Wouldn't have any issues with the SP now going up as you predicted ... and hey - it looks like it starts to rise ( 56 / 57 - :cool: );

Overall - not sure, whether I expect after the warning a huge profit this year (the analysts predicted anyway just 3 cts / share), but it feels they are moving into the right direction (with focus on international online sales). Looked for me at this price worth a punt (admittedly added to the high risk portfolio)!

[Latama]

3,649,040 through at $0.50 each.

Very interested to see how things pan out tomorrow, but safe to say that this would have to be their worst daily decline in at least the last 2 years (looking at NZX graph). Although feel free to correct me as I've not been following PPL for too long!

[percy]

I have no cause to shop for children's clothing,and have no reason to look at buying a business which has lost its fizz.
However ,if I did think of investing in PPL I would check out the other retailers in this field;Farmers,K Mart,Warehouse and Postie Plus to see whether PPL had better merchandise.
From what I am told, they don't.

[Xerof]

yes, I heard t'was trouble at mill over the summer holidays - some legal people got dragged off the beaches to go in and sort out some issues - don't know what they were but didn't sound great at the time.

I think it's well past midnight for this pumpkin

[golden city]

can't resist...,got in at 55c..

[golden city]

wonder who got the 3 million shares..and who is selling it

[golden city]

how low can it be

[winner69]

You really pissed off eh belg

How's this then for a shocker

Supply chain stuff ups as an excuse for poor sales usually suggests you run short of stock ......lack of stuff to sell ...lost sales

But they have $70m of inventories .....last 6 months cost of sales were $59m meaning they got more than 6 months stock on the shelves and in the warehouses.

As much stock as they had a year ago (sales were higher eh) and more than 6 months ago

This supply chain story doesn't seem to stack up

Less than 2 stock turns a year is terrible

You mention cash flow better ....but it's still negative

They be ok you reckon belg ....once the girls sort it out

[JayRiggs]

From the half year annoucement:

Dividend
The Company has not declared an interim dividend however the reinstatement of dividend payments to shareholders is a key milestone in the strategic plan currently being developed.

This is more meaningless waffle. The company is in no position to pay a dividend for a while yet... if they ever do. While I can agree the reinstatement of dividends is a key milestone in general, why is it a key milestone in the strategic plan being developed? Or any strategic plan for that matter?
You either got the money to pay shareholders a dividend. Or you don't have enough money, so don't pay a dividend. I don't know how the subject of dividends can be further elaborated and incorporated into this strategic plan???
I reckon they just wanted to make it sound better than the usual "dividend payments will be reviewed at half/full year".

My dear Di Humphries, please surprise me in this strategic plan with regards to dividends.

[ratkin]

I have no cause to shop for children's clothing,and have no reason to look at buying a business which has lost its fizz.
However ,if I did think of investing in PPL I would check out the other retailers in this field;Farmers,K Mart,Warehouse and Postie Plus to see whether PPL had better merchandise.
From what I am told, they don't.

Its the chinese websites they are buying from , not kmart or postie plus. Freight free , items for a few dollars

[percy]

Its the chinese websites they are buying from , not kmart or postie plus. Freight free , items for a few dollars

I think you are right.
In that case PPL have a HUGE liability with their retail stores,[leases,staff redundancies,stock to clear].With such large stock holding, means massive problems .
Maybe that ties in with Xerof's post #946.

[Mista_Trix]

Can I also add perhaps another perspective to the mix.

I am 31, HEAPS of my friends are having kids, times are quite tight, especially with the LVR having come in people in this demographic are living more frugally as they save for several years longer than they previously had to for a house. The people of my demographic are starting to swap more than buy, and on places like facebook I'm increasingly seeing 'who wants to borrow my boys baby clothes until I have my next kid' 'ooooh, ooooh yes please I'm due in 6 months..' type messages pop up.

The mindset of this age group was already quite different in relation to spending anyways, then add things like LVR on top of that, and I can see why a shop that sells overly expensive kids clothes isn't doing well.

Just my two cents.

[goldfish]

Well this held up better then i thought today, was thinking i could pick up some for under 50 cents but its held up ok...

[Silverlight]

So yesterday Milford (I am assuming, could have been Fishers or Harbour, as they both use TEA Custodians), sold out their final stake, of 3,649,040 shares @ 50 cents, and it was mainly picked up by Salt Asset Mgmt. They state on their site that they "look to invest in companies with strong management, which operate within sound industry structures and generate superior shareholder returns". The team are all ex-BT Funds mgmt. (i.e. Westpac).

Belg and Winner, I agree there is something here that does not seem right, the press release was horrible, like they only wrote it the night before, and no one proofed it, the strategy seems pretty incoherent, they mention Pumpkin Patch, then abbreviate to PPL, and then back again, compare data to 12 months ago not 6 months, keep blaming supply issues, and not really bleat on about any positives.

Honestly the comms person should be fired. If not that it almost seems like it is a coup… and they are trying to sound as crap as possible…

So to my starting point, Salt have bought in, they invest in superior management teams, and on the surface, Di was a good operator at Glassons, she has bought her COO with her, on the board Rod and Jan are pretty shrewd business people, it looks good for a long term play, unless...

Like someone mentioned earlier, this sell down provides the perfect opportunity for a management buyout, at a cheaper price.

Maybe that's what Salt are banking on…

[winner69]

Thank SL, good observations.

BTW that someone was the tea lady. :)

Wonder if TEA Custodians use the same tea lady?

[Xerof]

I wonder if their Bankers are treating them as idiots too Belg. Surely some covenants have been busted?

[winner69]

Patch is now such a dog and so so so cheap everybody will want to buy to capture the value in the patch brand

Salt seen the light ....watch Forbar follow with a buy recommendation .....and then more will jum n the bandwagon

When the rest of the market is s richly valued its time for the dogs to play

[golden city]

it is interesting., it looks like it is creeping up ..rather than down

[percy]

I the past year the share price has gone from $1.20 to 56cents.!
I would say the share price is in "free fall."

[Mart]

I heard a few things that I liked from the interview with Salt on radio live. They indicated that the fix for the supply chain risk was to move from two or three suppliers in China to twelve. They also indicated that Di was moving aggressively to address the business "issues". The reason you have less suppliers is to manage quality and keep safety stocks down but that falls apart with major environmental disasters like floods so to me the increase in suppliers makes sense to reduce the risk even if the cost is more inventory. How do Salt access this sort of detail from PPL?
I am not a retail specialist but I am aware of how fast the model is changing and I guess PPL will be well placed once a lot of the dust has settled as long as they don't run out of cash!

[Mart]

I guess it is keeping their O/Hds down.....quite a few nz textile businesses have Chinese nationals in their buying teams.....more complexity having to cover Vietnam too. But yes I agree it is a positive. Any idea how Salt access this sort of detailed info?

[percy]

Salt have most probably been talking to management.
Although interesting I doubt it is "market sensitive."

[BlackPeter]

Hmm - a quick check on ft.com indicates that not every analyst shares your views of PPL: medium 12 monthly SP target is 76 cts, however with a range of 50 cts to 100 cts.

Agree with your view of how brick and mortar shops are likely to develop, but I don't think the change will be very rapid in this case. Remember - many of their customers are likely to be cash rich grand parents buying something nice for the little angel, and they might not be the most prolific internet shoppers and as well still prefer to check "quality" by hand before they buy.

Had as well a look at the PPL webshop and looks better (and more affordable) than other childrens clothing websites which came up.

So - appreciate your view, and hey - you might be right, but I think there could be as well some reasons for the SP to rise from here. For my part - I bought in at 55 cts and am so far happy with the performance of my investment ;).

[winner69]

http://www.stuff.co.nz/business/unlimited/9913526/Time-for-change-at-Pumpkin-Patch

Belg - many will say what a load of codswallop and some will say that that Bella just doesn't get it.

My experience is hard to change/rejuvenate a brand when it has been stuffed up

Good luck to the girls anyway

Still chances to make your pyramid bigger

[percy]

Concur ... Pyramid stalled

Classic!!! Stalled pyramid.!!!! ??????????????//

[Hoop]

Classic!!! Stalled pyramid.!!!! ??????????????//

http://i458.photobucket.com/albums/qq306/Hoop_1/pyramidcar.jpg (http://s458.photobucket.com/user/Hoop_1/media/pyramidcar.jpg.html)

[percy]

http://i458.photobucket.com/albums/qq306/Hoop_1/pyramidcar.jpg (http://s458.photobucket.com/user/Hoop_1/media/pyramidcar.jpg.html)

Wonderful!!!! lol.in fact made my day.!!

[percy]

http://www.stuff.co.nz/business/industries/9918643/Postie-Plus-reports-bigger-first-half-loss

Any other struggling clothes retailer ...

Would you or some kind person post the link on Postie thread.
As expected "no surprises there." !

[BlackPeter]

PPL Marketing lassie isn't idle ... http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11234654

Percy, this vulture is looking closely at postie . ;)

Thanks for sharing this link ... some good news (or at least good prospects) is a pleasant change ...

[BlackPeter]

They may not have had time to update their figures ...

from: http://finance.yahoo.com/q/ao?s=PPL.NZ+Analyst+Opinion

Price Target Summary
Mean Target: 0.63
Median Target: 0.62
High Target: 0.80
Low Target: 0.46
No. of Brokers: 4

Ouch!

fair enough - ft. com (as per April 4th - no, actually March 28th) is now as well down to a mean of 65 cts and a range from 46 cts to 90 cts (though still a bit rosier than yahoo). Given all this demand in the middle east can it be only upwards from here ;) ...

[percy]

Was down country working recently and visited a PPL store. Packed with bland and very un-PP type of clothes. I'm guessing these were tacky substitutes to fill the store over Christmas due to the "supply chain issues". Staff didn't seem to know.

This experience made me check out a few other stores. Some were the same. Almost a clearance like environment. The "brand", IMO, has been pretty severely damaged. Not only will it take ages to clear this substandard stock but the margins will be awful and stock value writeoffs look likely.

Hence the stalled pyramid. I don't think it likely NP for full year will be more than $2m and that might be a stretch. Certainly not anywhere near enough to justify a sp of 55c.

And the short term support level at 55c has just been trashed albeit on small volumes but there's no support in the buy side depth. My guess is that we'll see further small selling but some funds (if they still hold) may be forced by deeds to sell. Basically, what i'm saying is "watch out below".

Next pyramid layer may be at 30c, slightly above supposed NTA .... Sad, isn't it?

Do you think this company can be turned around?
I have my doubts on retailers who have stores in Malls.Other than anchor tenants.

[kizame]

Very sad, I used to think this company was really going places,they havn't been able to recover from the GFC.
Was looking at the shareprice and chart,and thinking i should keep an eye on this one for a turn around,but doesn't sound like anytime soon.
I hope they do.

[percy]

Very curious to know why you said this. I do a lot of work in retail, and know a thing or two about shopping centres.

Depending on the business,rentals now account for up to 20% of turnover while staffing costs have risen to up 15% of turnover.Added to this franchise fees and increases in insurance fees there is little left.I am thinking of gift shops,chemist shops,book shops etc. I have also noted the likes of Michael Hill and Hallensteins complaining of over the top rentals.
On line retailers can operate out of very cheap space,so Mall retailers face further head winds.

[BlackPeter]

Depending on the business,rentals now account for up to 20% of turnover while staffing costs have risen to up 15% of turnover.Added to this franchise fees and increases in insurance fees there is little left.I am thinking of gift shops,chemist shops,book shops etc. I have also noted the likes of Michael Hill and Hallensteins complaining of over the top rentals.
On line retailers can operate out of very cheap space,so Mall retailers face further head winds.

Percy, I do see your point, though the percentual cut which rents and salaries take obviously depend as well on turnover and staffing levels (i.e. not every shop is equal). Staffing cost won't be significantly lower in online retail (though you need less nicely dressed sales people, but more people processing the orders and providing after sales service). Sure - rents will be significant cheaper in online retail.

On the other hand - I buy a lot online, but for buying apparel and shoes I normally go into the shop (which may or may not be situated in a mall). Many things look nice on screen, but I need to feel the cloth, see the quality and actually smell how much chemicals they used when processing their garments. Too many online disappointments so far. I am sure that I am not alone with this experience.

I don't see malls dying as long as the shops in there manage to differentiate themselves from the online world - with good (and consistent) quality, customer service and the opportunity to see, smell, try and feel what you are buying. Still agree that online content will increase (up to a saturation level, probably well below 50% of overall). I think as well that Pumpkin Patch could have what it takes to survive in bricks and mortar shops (as well as online) - but at the end it depends on quality and having the right nose to pick the products people will want for the next season. Admittedly - Belgarion's reports are not that encouraging in this regard, but maybe they still need some time to recover from reorganisation and supply chain issues (cross fingers).

Discl: holding (a quite small parcel)

[percy]

Online store.
Approx overheads.
Rental cost 3% of turnover.
Staffing costs 4 % of turnover.
Type of business.photo equipment,beauty products,books,clothing,shoes,giftware,curtains,fi shing/hunting,sporting goods,health products,hearing products,kitchen ware,and so the list grows.
Go to www.estaronline.com and check out their client list.
Malls may survive,however the mix of shops will change.
Maybe bigger food courts??!! lol.

[golden city]

look at the shops., and online offering.., thing has changed a bit...the quality of product has improved lots

[golden city]

hopefully will see something good news comming osson

[percy]

One notes no management are buying with the share price at an all time low.

Either they don't back themselves to effect a turnaround ... Or they expect the s.p. to fall further?

Maybe both!!!!!

[macduffy]

For a totally unscientific consumer survey of one, here's what my wife, a highly experienced buyer of grandchildren's clothes, had to say about a visit to the local PP yesterday.

" A jumble sale of odd clothes in strange colours - and what's with all that faux "royal" stuff? "

:t_down:

[macduffy]

The singularly unanimous verdict was that the website offering was vastly superior to the jumble in the store, although the corgi jumpers again invited more scorn than warm fuzzies. Giving the company the benefit of the doubt, they are probably still working their way through clearing a lot of "remnant" stock - but with some cost to their stores' image and presentation.

[percy]

Many thanks McD. And thanks to the "highly experienced buyer". Hope she buys online.

Then there is only the small matter of closing the retail stores.!!!! lol.

[macduffy]

Many thanks McD. And thanks to the "highly experienced buyer". Hope she buys online.

Yes, on occasion - but normally prefers to "feel the width".

[Snow Leopard]

Sub 50 by COB?

Is that a new kind of sandwich?

Best Wishes
Paper Tiger

[winner69]

now don't get greedy belg .... let it drift lower

your note re rob Campbell and gpg wanting to shake things up .... pumpkin would be a possibility .... they now about threads and rags and such things

what you say

[winner69]

Jeez if an analyst says 45 he really means 35 allowing for the 20% optimism factor

Valuation ......could be anything from a bit less than now to heaps so I will let the voting machine decide a value for me

[winner69]

belg there were some pretty big buys by AMP has well

Not done too well trading this lately have they?

Maybe really pissed off .....but have another 9 mill shares

[winner69]

they were part of the announcement belg

[BlackPeter]

Gripes! CFO resigns after 14 years ... Rats (no offense intended) leaving a sinking ship?

maybe ... but on the other hand - 14 years in the same position are a long time in anybody's book. As well, I am not sure, whether the CFO would be the key person for PPL's turnaround.

Might be really just somebody working on his life - career plan.

[winner69]

Different response to the announcement

Belg wanting to buy cheaper / BlackPeter holding and hoping he'll get into profit one day

Methinks he been happy there for so long but said to himself there's no fun left here now with this constant struggle to overcome the recent stuff ups so I look around .....but maybe the girls pushed him. Who knows

[BlackPeter]

Different response to the announcement

Belg wanting to buy cheaper / BlackPeter holding and hoping he'll get into profit one day

Methinks he been happy there for so long but said to himself there's no fun left here now with this constant struggle to overcome the recent stuff ups so I look around .....but maybe the girls pushed him. Who knows

Looks like Mr. Market not very much moved by the announcement anyway.

Related to winners "analysis" - yes, I am holding (some) as disclosed earlier in this thread and expect the stock to turn around (time frame - say 12 to 18 months).

Read your own crystal ball!

[biker]

:31pm, 23 May 2014 | FORECAST
Pumpkin Patch Limited has today provided a general market update.

Trading Conditions/ Full Year 2014 earnings
Trading conditions in the Company’s key Australian and New Zealand retail markets have remained at levels similar to those experienced across the first half period. The trading environment is volatile and continues to be dominated by high levels of promotional activity and lack lustre consumer demand especially in Australia where there is little sign of any meaningful improvement in the near term.

Subject to any material change to trading conditions, exchange rates, or international partner’s delivery schedules across June and July the Company is expecting FY14 full year earnings after tax but before reorganisation costs to be between $1.0m to $3.0m (FY13: $8.5m) which is consistent with average market analyst forecasts.

Strategic Review
The strategic review of the Company announced in March is well advanced. The review is primarily focusing on the drivers of underperformance in recent years and the identification of longer term opportunities to improve operational and financial outcomes.

While key long term operational and brand related strategies have not yet been finalised the review to date has identified a range of system and process investment requirements that will generate improvements in underlying earnings and working capital and debt requirements.

The Company expects to provide a further update on the strategic review by the end of June.

ENDS

[winner69]

Well they did say a couple of months ago there was likely more downside risk than potential upside. well done they got that bit right.

So no profit in H2

If the main task of the CFO is to sit like a king in his counting house counting out all his money (profits) no wonder Matt is leaving ...he got bored counting nothing

How long will this train wreck last Belg?

[winner69]

A couple of verses from Sing a Song of Sixpence - just imagine Matt and Di


The king was in his counting house,
Counting out his money;
The queen was in the parlour,
Eating bread and honey.

And then I wonder who will be kings doctor to fix this mess up

They sent for the king's doctor,
who sewed it on again;
He sewed it on so neatly,
the seam was never seen

[winner69]

from recent announcement:

[I]

Haven't PPL been "reorganising" for the past 5 years now?


..........and fixing the supply chain I am told

[winner69]

Just as well patch not much of a seasonal business


http://www.theage.com.au/business/unseasonably-warm-weather-sends-chill-through-retailers-20140525-38wq9.html

[Sideshow Bob]

For a totally unscientific consumer survey of one, here's what my wife, a highly experienced buyer of grandchildren's clothes, had to say about a visit to the local PP yesterday.

" A jumble sale of odd clothes in strange colours - and what's with all that faux "royal" stuff? "

:t_down:

Wandered into PP at Pacific Fair on the GC last week. Would have to concur that the above summation is quite accurate. Few punters walking in, but not staying long.

By comparison the smaller Cotton On Kids across from it was steady, but a much better and clearer offer. Plus the had a smoking hot shop assistant that would pull any dads into the shop and spend!!

Not holder.

[Hoop]

Startling number of similarities PPL has with Postie Plus ... Same outcome?

JB Were :mellow:

[winner69]

Startling number of similarities PPL has with Postie Plus ... Same outcome?

And parts of PPL have experienced administration / Chapter11 in the not too distance past.

[winner69]

And surely everything that Jan gets involved can't turn to custard .....surely not

[BlackPeter]

Startling number of similarities PPL has with Postie Plus ... Same outcome?

Well - yes, the SP-trend over the last 2 years looks quite similar. Difference is that PPL still made some money (in each of the last 4 years), and PPG is running losses for the last 3 years or so. Had as well huge problems with moving their distribution centre (or are you thinking to compare with PPL's supply chain problems?).

And just looking at what the local Postie Plus shop had on offer - quite sad selection of old fashioned stuff. We made it once into the Christchurch Postie Plus shop, just to decide that this is not the shop to purchase our clothing, despite it being quite close to other shops we visit regularly.

If PPL is following PPG, than they should have at least another 3 to 4 years - but hey, I am an optimist and believe in women's power ;). Agree however that close monitoring of the stock might be sensible.

[BlackPeter]

cautiously optimistic article in NBR:

http://www.nbr.co.nz/article/pumpkin-patch-sees-lift-below-average-financial-ratios-after-review-wont-seek-more-capital-b

CFO thinks they get after the review through changes without the need for additional capital; 12 month share price target 58 cts (currently 48 cts);

[winner69]

Cross posted from the Postie Plus thread. In the Gaynor piece he clearly points out where PPL is at and where it is likely to end up. It is a warning - and well made at that. Be careful people.

The main point of that article re Patch was

Briscoe and Pumpkin Patch are two large listed retailers at the opposite extremes of the debt and lease commitment obligations spectrum.

At the end of January Briscoe had no debt, cash of $84.4 million, operating lease commitments of $106.4 million and earnings before interest and tax (ebit) of $45.2 million for the previous 12-month period.

On the same date Pumpkin Patch had $55 million of debt, $1.8 million of cash, operating lease commitments of $117.4 million and ebit of only $4.9 million for the previous 12 months.

These are the reasons why Briscoe continues to raise its dividend while Pumpkin Patch no longer pays one.

And we shouldn't forget that PPL once used chapter 11 in the US to close down 15 stores and get out of ongoing lease obligations when they got into serious trouble over there

[winner69]

That's how I read it too ... A Feltex-like warning: "just because its a kiwi icon doesn't mean it won't go belly up."

Postie CEO said he was taking over an 'iconic NZ retailer' .....good one MR Binns

[Silverlight]

The article seems to suggest the following: "Pumpkin Patch - not at any price"

I disagree. While he was highlighting the tough situation PPL find themselves in, at the right price he would be a buyer.

Negatives, highish debt ($55m down from $70m in 2010, all taken on during the GFC), lease obligations $117m (but down from over $260m in 2010), low interest cover (which is off earnings not cashflow), maybe the bank comes knocking, was over 5 times in 2010.

Positives, online sales up 35% first half, ebit up 25%, quality has improved, which is their core value proposition, this drop during GFC, due to cost cutting maybe effecting Australasian sales, but won't impact global, gross margins are below historical norms circa50%, back to 60% provides a one off catalyst, free cash flow per share has remained positive for the past 2 years.

PPL faces some challenges, but once the picture is rosy, and outlook is great the stock will be well up from here.

Restaurant Brands went through the same issue with Pizza Hutt Victoria, in 2007, the loss making venture weighed on the share price so much investors bailed out all the way down to 70 cents, great buying for those who had conviction, and once they exited and re-focussed on the where the margins were best, a very long rally has ensued.

Pumpkin Patchs refocus on Quality clothes, with good designs, with mutli- channelled delivery, will prove them successful.

Disc: I have picking some up below 50 cents.

[percy]

Pumpkin Patch was a breath of fresh air on the retail sector when they listed.Excitement,fizz,great designs,nice colours,bold foot-print.Lovely clothes for children.Good reputation,strong following.
The fizz is gone. The novelty has gone.The originality is gone.No excitement.The sense of purpose is gone.
Now they are just another struggling rag trade retailer, in an over crowded poor performing sector,whose overheads, lease commitments,and poor logistics are a concern.

[percy]

Not a bad summary Percy. It's worth keeping in mind that when PPL was "breath of fresh air" the retail scene was pumping and it'll start pumping again ... But it may be too late for PPL.

Hope you're right, Silverlight.

discl: sold all for a loss. Now waiting and watching but consider this a high risk play at a time in the market cycle where risk avoidance is a better strategy as consumers may just not return.

I hope you are right and the retail sector does start pumping again.Should it do so, I would expect it will be new exciting players who set it alight.!

[percy]

Headline in this morning's www.theage.com.au "Retailers say federal budget has given buyers the blues."
So looks as though the pumping is still some way off!

[winner69]

Headline in this morning's www.theage.com.au "Retailers say federal budget has given buyers the blues."
So looks as though the pumping is still some way off!

Patch not affected by the weather they told us .....but if the budget stops consumers buying patch affected.

These days the winners in the rag trade (excepting the really high end stuff) are generally those with best supply chain and best value for consumer (read price).

I don't see patch having any 'competitive advantage' anymore. As somebody pointed out the excitement and hype is with new brands and concepts.

In spite of the girls at patch spending zillions on consumer research it is hard to 'reinvent' what is an 'old / past its due by date' brand to something new.

Where it is now, sales wise, is about the best it can do and it's place in life.....with a risk of a gradual slide to oblivion

[Xerof]

Agree W69, As I said long ago, it's well past midnight for this pumpkin

[percy]

Agree W69, As I said long ago, it's well past midnight for this pumpkin

You were right,!!
But wait,there's more.!!
www.couriermail.com.au "Profit warning from Pacific Brands,and The Reject shop."

[Silverlight]

Silverlight, If I may be so bold as to offer a little advice ... Calculate a stop loss and stick to it. You can always come back later if PPL doesn't go belly up and at present cash (even with a small loss) is far safer than being in PPL.

Thanks for advice Belg, stop losses are always a good idea for positions.

[BlackPeter]

Agree W69, As I said long ago, it's well past midnight for this pumpkin

"Well past midnight" - you mean dawn is near .... and you see already a silverline at the horizon? Sorry - couldn't resist ...

Have admittedly as well somewhat mixed feelings about PPL's current performance (and luckily only a small holding). Learned as well from past experience, that the time when everybody sells is not necessarily the right point to follow the stampede (well, sometimes it is and often it is not, but only hindsight can tell).

Concur with Belgs advise to set a stop loss - and good on him that he warned people already before exiting himself! On the other hand it might be currently the stop losses tearing the SP down. Did anything material happen over the last two weeks or so to PPL - or is it just sentiment related to Postie Plus, further on fired up by Pacific Brands recent profit downgrade (which is not that bad, but yes, its a downgrade)?

Not saying that I expect PPL to shoot soon back into the sky, but not sure either, whether the current price is really a fair reflection of its value. FT.com still shows currently a median SP Target of 58 cts (range from 42 to 80 - but admittedly the target price is dropping since the beginning of the year) and it shows as well for 2015 a (slightly) increased NPAT estimate.

Probably wait for the storm to pass and will reassess the ships condition afterwards. No recommendations here for others - I might find out afterwards that the ship went down ... but on the other hand, it might still be sea worthy and fetch a better price then than now.

[Hoop]

Silverlight, If I may be so bold as to offer a little advice ... Calculate a stop loss and stick to it. You can always come back later if PPL doesn't go belly up and at present cash (even with a small loss) is far safer than being in PPL.

Today is my due date to pay ACC.....As I part with about 5 weeks!!! worth of income each year to this outfit, it's difficult not to think about some of my money which has gone to accumulate their 15 million PPL shares (9%).. all the accumulation has happened during the downtrend using the "lets catch the falling dagger" strategy bought on by rose tinted forward FA...
Hate to think how much paper loss is with PPL must be tens of Millions of dollars...all was avoidable

Belg ...these financial geniuses at ACC need your help

This raw Live weekly period 10 year chart says it all....A continuing downward roller coaster ride to investor hell ..........(lower highs lower lows)

http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=NZ%3appl&uf=0&type=64&size=3&sid=1755333&style=320&freq=2&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=13&rand=1599012964&compidx=aaaaa%3a0&ma=0&maval=50%20200&lf=1&lf2=8&lf3=0&height=665&width=720&mocktick=1

[JayRiggs]

Dang that's a sad looking chart. Confidence in PPL at an all time low.
It was only 4 years ago in FY2010 when they had a net profit of $25 million and a good dividend, even with the loss making US and UK stores in operation. I don't blame the retail environment at all, when most of the other NZX retailers have been growing earnings (KMD, BGR, MHI etc) or doing OK (WHS, HLG etc).
Something needs to be done to reinvigorate the brand!
Eagerly awaiting an update on their strategic review to see what they've got.

Someone on NBR makes a good comment that PPL with a large retail footprint, need to put something in stores that people want to buy. (http://www.nbr.co.nz/article/pumpkin-patch-1h-profit-slides-98-percent-poor-australia-sales-disrupted-supply-high-kiwi-bd)
And I can agree with that. The stores are quiet every time I walk past. Quite simply, people don't have a real need to buy high quality kids clothes if you can get it cheaper at the Warehouse. They can resolve all these supply chain issues, reduce their debt and so on, but if not enough people are going into the stores, it's not good enough.
I think it would be a good idea to diversify into other kids products? Like toys, educational tools, baby food etc... anything to get people into stores!

With Rod Duke on the board, Briscoes could lend a helping hand. Perhaps have little Pumpkin Patch sections in Rebel Sport. Pumpkin Patch sports.

[BlackPeter]

discl: sold all for a loss. Now waiting and watching but consider this a high risk play at a time in the market cycle where risk avoidance is a better strategy as consumers may just not return.

Hi Belg, just joined the club (sold out with a 20% loss). The last straw for me was when I visited earlier this week the central Christchurch PPL outlet. Lots of free parking space in front of the shop. The garments they had on offer looked quite un-inspirational (the colours are a real problem - not like the stuff they offer on-line). Despite the cheap prices: lots of "3 items for $10" and similar and "60% off everything" signs at the windows, at that time only one other browser in the shop. Didn't notice any buyers. Must be still the same stock as described by others (or was this you?) in this thread some months ago.

Totally different experience when I went straight afterwards to the Warehouse some km up the road. Lots of buyers / queues at the checkouts - and actually a quite nice selection of children garments.

Shame - great business opportunity, and some others in clothing retail don't do that bad: HLG, KMD, WHS. Admittedly - others do - Postie Plus. Well, still might work out for PPL (I wish them well), but in my view is now the risk that it gets worse before it gets (maybe) better just too big.

As you said - need to watch the sales trend - and they will need a more convincing sales proposition than they currently have to turn the trend around.

Discl - hold WHS and sold PPL, and as always ... my crystal ball is cloudy - DYOR;

[winner69]

Another PPL announcement. I think it said that things are still pretty bad but this years results won't be any worse than what we said a few weeks ago .....but heck we will make heaps in a year or so.

Highlight of the announcement this gem - .The Board believes that current financial performance is below an acceptable standard.

Wow - bright guys eh in recognising/believing that

[traineeinvestor]

Another PPL announcement. I think it said that things are still pretty bad but this years results won't be any worse than what we said a few weeks ago .....but heck we will make heaps in a year or so.

Highlight of the announcement this gem - .The Board believes that current financial performance is below an acceptable standard.

Wow - bright guys eh in recognising/believing that

Maybe they finally got around to checking the share price?

[winner69]

Should have read more closely

Actually says we going to write off the value of our IT systems and make inventory write downs this year.

Wonder how many zillions that will be ....no worries though as these are non cash adjustments to the profit (except the excess inventory should have been turned into cash before this or never bough in the first place)

Also just a subtle hint of store closures ....but we leave that cost to the next announcement

[winner69]

Echos of their close cousins PPG here (only cousins because PPL and PPG look he same)

[Crisis]

'Omni-channel business model' is probably the key for retail sector, especially for PPL to re-establish brand image. Can they deliver?

[percy]

Another PPL announcement. I think it said that things are still pretty bad but this years results won't be any worse than what we said a few weeks ago .....but heck we will make heaps in a year or so.

Highlight of the announcement this gem - .The Board believes that current financial performance is below an acceptable standard.

Wow - bright guys eh in recognising/believing that

What a classic saying.Not up to Emperor Horohito's all time great though; "The war has developed not necessarily to Japan's advantage."

[winner69]

Hands off belg ... keep calm .... those under 40 are earmarked for somebody else

[winner69]

ney Belg ....seeing PPL was once $5 doesn't it make 39 cents seem so so so cheap

[percy]

Oh dear!!!!!
Well at least the down trend remains intact.!!! lol.
Read an article in The Hearald the other day on retail.More negative than me.!!!
I really believe Mall owners must reduce their rents before stores go broke.Worst thing for any retailer is to be next to a vacant shop.Must be a very long bleak winter for struggling retailers,both here and in Australia.

[BlackPeter]

Somehow I find it much less painful to monitor the SP trend after I sold out (at 44 cts) ...

Article in todays NBR - not much news, just re-iterating the current pain of the retail sector:
http://www.nbr.co.nz/article/pumpkin-patch-slides-record-low-rag-trade-woes-extend-bd-159038

Still try however to align that article with the info I heard yesterday (I think in "Nine to Noon"). Somebody said that e-commerce is growing (surprise), but than they said that the current market share of internet sales in NZ is roughly 6%. Given that, and given that many of the hurting retailers even sell online themselves (i.e. they must have some share of the 6%) - is it really the wicked internet which makes PPL (and some others) hurt? Or is it much more the incapability of its management to provide a desirable product at acceptable terms in a great client experience (as others seem to be able to)? People still buy ... they just become a bit more selective

[percy]

I can't find the Hearald article I referred to earlier,however you have a point.You may enjoy the Hearald article "Interest rates citied as drag on mall landlord."
There will always be a retailer who goes against the trend.
Yet the retail sector here and in Australia is not a good sector to be in.Customers are using stores to check out products,then buying them a lot cheaper on line. Customers are watching their spending.Competition means lower margins,yet wages,rents and longer opening hours means higher overheads.
I know a little about the book trade;I would think 50% of NZ's bookshops ran at a loss this year,I would expect more closures and failures.I would doubt there will be many bookshops in Malls in 5 years time.Maybe one in three bookshops that are in Malls would have made a profit.ie two thirds ran at a loss.Sorry I can't supply facts and figures.

[BlackPeter]

I can't find the Hearald article I referred to earlier,however you have a point.You may enjoy the Hearald article "Interest rates citied as drag on mall landlord."
There will always be a retailer who goes against the trend.
Yet the retail sector here and in Australia is not a good sector to be in.Customers are using stores to check out products,then buying them a lot cheaper on line. Customers are watching their spending.Competition means lower margins,yet wages,rents and longer opening hours means higher overheads.
I know a little about the book trade;I would think 50% of NZ's bookshops ran at a loss this year,I would expect more closures and failures.I would doubt there will be many bookshops in Malls in 5 years time.Maybe one in three bookshops that are in Malls would have made a profit.ie two thirds ran at a loss.Sorry I can't supply facts and figures.

Hi Percy,

read the article .. and yes, there are some threats to NZ style (or should I say US copied) malls. Yes, they have huge overheads and add little value. Last time I checked we had in Christchurch at least 6 big (and countless small) malls - pretty ridiculous for some 400k people - isn't it? And each of the malls provides pretty much the same shops and services - either you get what you look for everywhere, or (more likely, if you are looking for something special) not at all.

So - yes, can very well imagine that malls might start to struggle. Can you imagine to live in a city without malls? I can. actually grew up in one nice mall-less (as most) town in central Europe - and hey, you can here only dream of the variety of goods they offered in the local shops (no malls) over there.

Actually I thought, this could have been PPL's strength - standing out of the crowd and offering really good childrens garment which every grandparent would want their little darlings to wear. Something real special, not the tasteless c..p they sell these days on permanent specials (excuse the pun).

Agree as well with your observation on bookshops, but not quite sure whether what happened with them is symptomatic for retail overall (though there are parallels).

Bookshops in NZ have the problem of lacking critical mass. Same as the malls - lots of (actually too many) bookshops, but each with the same extremely limited set of books on offer. Either you get your book everywhere (if its the standard best-seller) - or you get it nowhere (well, in a NZ bookstore, obviously you can order on Amazon). Borders was for a short time a pleasant relieve, but they probably came too late - people didn't expect anymore to find something worthwhile in a NZ bookshop. Not sure, whether you have been ever in some of the (still) magnificent European or Asian bookshops? They certainly do better than the typical Whitcoulls around here. They have real selection and they have staff who know their books.

The other bookshop problem is e-books. We completely moved over to them ... and now we can again buy any book in the world ... with instant delivery.

O.K. - sorry for the book deviation on a PPL thread, but you somehow hit a nerve ...

Good for PPL and others, that they didn't invent e-clothes yet, but who knows - maybe this is next? Until we reach this stage I believe that retail can still do very well when they stop to offer everywhere the same stuff everybody else sells, but move to offering something special: special products & very special customer experience.

[percy]

Hi Percy,



Actually I thought, this could have been PPL's strength - standing out of the crowd and offering really good childrens garment which every grandparent would want their little darlings to wear. Something real special, not the tasteless c..p they sell these days on permanent specials (excuse the pun).

I believe that retail can still do very well when they stop to offer everywhere the same stuff everybody else sells, but move to offering something special: special products & very special customer experience.

That was why PPL was successful.They were different.They did offer exciting chidrens' clothing.Something real special grandparents wanted to buy.
But they don't do it now.The fizz has gone.Other retailers have caught up,and past them.
Agree with your comments on bookshops.

[winner69]

Talking of malls or as Black Peter asks can you imagine living in a city with no malls .... its happening

You will love this site

http://deadmalls.com/

[Joshuatree]

Wow 100's of dead malls. New chant "USA...is in decay...""USA is...

[BlackPeter]

nearly fall of my chair ... ft.com increased this week its medium share price target for PPL to 70 cents (range 46 to 80 cents). Is this just a typo - or do the analysts see something we don't?

Discl: Too scared to hold :scared:

[winner69]

Belg, don't think we will see the 30s ever again

What you think

[winner69]

To me its about sales ... How many years have they been in decline? 6? What about how many years they've been "restructuring"? 6 also? ... Yeah. I think 30s will be seen again.

NO NO belg, you are incorrect - sort off

Last years were about the same as they were in 2005

This years sales look like going to be what they were in 2004

So acquisitions, restructures, strategic reviews, online, expansion, omnichannel etc etc and still the same size as when they floated

Some success story eh

But this time it is different. The girls wil see to that. Blackpeter will get rich while we wait for 35 cents

[BlackPeter]

NO NO belg, you are incorrect - sort off


But this time it is different. The girls wil see to that. Blackpeter will get rich while we wait for 35 cents

nice to think, but unlikely with PPL (not holding ;)....)

[percy]

Yes,well,earnings after tax [before reorganisation cost] between $1mil and $2mil.Reorganisation costs of around $12mil.
So reorganisation costs are between 6 years and 12 years of profits!!????????????????????????
Better not have to reorganise themselves again next year!!!!!

[winner69]

At least they have a summer collection this year. Lets hope that the normalised summer comes on time.

Looking good for FY15

FY15 Trading
The Company further advises that, whilst it is very early in the season, trading in the beginning of FY15 has been encouraging, and that the summer season collections have been positively received.

[Beagle]

Yes,well,earnings after tax [before reorganisation cost] between $1mil and $2mil.Reorganisation costs of around $12mil.
So reorganisation costs are between 6 years and 12 years of profits!!????????????????????????
Better not have to reorganise themselves again next year!!!!!

I love Friday's...all the best humour comes out in people. That's PURE GOLD mate :)


Why would anyone think next year won't be any different? They've been "re-organising" for the past six or more years.

What does "positively received" mean? One of their focus groups thought the range looked "nice"? Show me the money! Show me the sales! Show me increased margins. ... And show NZ and Oz governments just how badly the global I-net with its untaxed offshore sales is affecting local business!

Positively received is corporate spin for "The sales decline this year isn't as great as last" :) You guys are bang on the money, another stock to avoid like a plague.

I think we need a seperate humour thread for all the finest examples we can find of "corporate spin" Would give us old hands something to have a chuckle about and serve as a warning to newbies who can sometimes fall into the trap of believing at least a small part of the B.S. some of these directors come out with.

[Beagle]

LOL ... But I am watching very closely. Very, very closely. ... A big player may step once all looks hopeless and take the company private.

Of course, they'd be buying the brand. ;)

They might as well wait till it inevitably falls into receivership and then they can freely exit all the expensive mall leases and move to an all online business model :) Hands up anyone who thinks they can make money sustainably any other way...

[Harvey Specter]

What does "positively received" mean? Considering my wife never steps a foot in their door, I would say they are definitely doing something wrong.

[Silverlight]

Considering my wife never steps a foot in their door, I would say they are definitely doing something wrong.

Harvey, if you're anything like your moniker's character, I would have thought your wife would only ever shop at Kirks or Smith & Caugheys ;)

[Hawkeye]

http://www.nbr.co.nz/article/pumpkin-patch-overhauls-board-chair-freeman-retires-bd-162763

[winner69]

http://www.nbr.co.nz/article/pumpkin-patch-overhauls-board-chair-freeman-retires-bd-162763

Jane was appointed to PPL Board about the time of the IPO

Some 10 years on Patch not worth as much as it was then.

But at least she leaves with patch 'positioned for the future' ....not even well positioned.

Not really one of Janes's successes in life

[winner69]

Belg would be pleased with these moves

[Beagle]

Wandered past the New Lynn store in Lynnmall on the weekend. Lack of colour in the window didn't make either my wife or I feel inclined to go in...that and both our grandkids are already thoroughly spoilt :)

I'm not sure why they don't understand the basics of a nice attractive colourful window display, go figure ?

[The Grinch]

MMmm definitely pretty negative sentiment.

Can't say I know the stock - but skimming through the 2014 summary I see that the majority of there sales take place internationally. Doesn't this company stand to get a little pick me up with the falling dollar? not to mention it sounds like they really dropped the ball re adequate stock going into the 13/14 summer - hence the better safe than sorry "healthy" stock levels going into this one.

Whats to stop a little good news seeing this bounce closer to the 60c mark? I see forsyth barr has a Sell recommendation.

Anyone willing to say there's a glimmer of hope... or run, run as fast as you can?

Cheers
TG

[percy]

MMmm definitely pretty negative sentiment.

Can't say I know the stock - but skimming through the 2014 summary I see that the majority of there sales take place internationally. Doesn't this company stand to get a little pick me up with the falling dollar? not to mention it sounds like they really dropped the ball re adequate stock going into the 13/14 summer - hence the better safe than sorry "healthy" stock levels going into this one.

Whats to stop a little good news seeing this bounce closer to the 60c mark? I see forsyth barr has a Sell recommendation.

Anyone willing to say there's a glimmer of hope... or run, run as fast as you can?

Cheers
TG

Can't offer advice on this company.!?! However for inspiration
you are best to go to You Tube, and listen to The Spencer Davis Group's "Keep on running".

[Chaowee88]

MMmm definitely pretty negative sentiment.

Can't say I know the stock - but skimming through the 2014 summary I see that the majority of there sales take place internationally. Doesn't this company stand to get a little pick me up with the falling dollar? not to mention it sounds like they really dropped the ball re adequate stock going into the 13/14 summer - hence the better safe than sorry "healthy" stock levels going into this one.

Whats to stop a little good news seeing this bounce closer to the 60c mark? I see forsyth barr has a Sell recommendation.

Anyone willing to say there's a glimmer of hope... or run, run as fast as you can?

Cheers
TG

And the end is well and truly coming, 34 as I speak AMP dumping large amounts, floodgates well and truly open, no end in sight.

Postie Plus X2 on it way.

Please tell me it won't happen, an iconic brand such as pumpkin patch can end up in the scrap heap, never thought I'd see the day.

[winner69]

Now we know why belg deleted himself once an for all and never to appear on these boards again.

It was so he could accumulate as many as pumpkin as he could an then take them over and put his superior management skills to work to resurrect this iconic brand. No, I wouldn't go as far as saying iconic.

He always said it needed a decent man to right the ship

[percy]

Now we know why belg deleted himself once an for all and never to appear on these boards again.

It was so he could accumulate as many as pumpkin as he could an then take them over and put his superior management skills to work to resurrect this iconic brand. No, I wouldn't go as far as saying iconic.

He always said it needed a decent man to right the ship

The ship is sinking quickly.
All belgarion would have ended up with would be "under-water pyramids".!!! And he was too clever for that.
He is very much missed.!

[winner69]

The ship is sinking quickly.
All belgarion would have ended up with would be "under-water pyramids".!!! And he was too clever for that.
He is very much missed.!

He did OK with his Feltex pyramids .... was about to file a SSH notice when the ship sunk

[Snoopy]

The ship is sinking quickly.


Surely not! With all that girlpower at the top, Pumpkin Patch is a poster child for diversity. And as we know, diversity will lead to outperformance. A Chinese woman for appointment to the board is surely the recipe for steadying the ship?

Or perhaps the whole patch will be absorbed into Heartland, fixing the diversity issues there?

SNOOPY

[winner69]

Surely not! With all that girlpower at the top, Pumpkin Patch is a poster child for diversity. And as we know, diversity will lead to outperformance. A Chinese woman for appointment to the board is surely the recipe for steadying the ship?

Or perhaps the whole patch will be absorbed into Heartland, fixing the diversity issues there?

SNOOPY

You just don't get it Snoopy

Diversity is WHAT pumpkin needs .... it needs some mature GUYs to make a more diverse management team

Too much girl power is not diversity. Think said enuff

[percy]

Surely not! With all that girlpower at the top, Pumpkin Patch is a poster child for diversity. And as we know, diversity will lead to outperformance. A Chinese woman for appointment to the board is surely the recipe for steadying the ship?

Or perhaps the whole patch will be absorbed into Heartland, fixing the diversity issues there?

SNOOPY
Love it, although I think this sinking ship would fit better with that great Australian "pig ore" company ARI.!!!!!!!!!!!!!!!!!!!!!!!
I think PPL will prove "the girls" can get it wrong too.!!!!!!!!!!

[percy]

You just don't get it Snoopy

Diversity is WHAT pumpkin needs .... it needs some mature GUYs to make a more diverse management team

Too much girl power is not diversity. Think said enuff
Enuff said. Must agree..!!
[and not just on this thread.] ??????????????? lol.

[winner69]

Enuff said. Must agree..!!
[and not just on this thread.] ??????????????? lol.

What will you think of diversity when an Aussie girl joins the Heartland Board

[percy]

What will you think of diversity when an Aussie girl joins the Heartland Board

Well if she is anything at all like EBOS's Elizabeth Coutts, or Sarah Ottery I will be very pleased,however an ex PPL type no.
Gail Kelly [Westpac'sCEO] would make a fine addition to HNZ's board.

[winner69]

Well if she is anything at all like EBOS's Elizabeth Coutts, or Sarah Ottery I will be very pleased,however an ex PPL type no.
Gail Kelly [Westpac'sCEO] would make a fine addition to HNZ's board.

Agree

Their diverse views would enhance the total boards already good performace

[winner69]

Things don't seem to be getting better

Hope (like hell) seems to be the current strategy. That's OK with the Salt funds guy who is not worried.

Cap raising at 10 cents to keep thing going, in hope

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11364367

PS. Belg must be hurting ....but averaging down big time

[Jay]

I thought Belg said he had sold at a loss before he vanished off these shores, taking his posts with him

[percy]

Closing unprofitable stores can be a very expensive exercise.
Again we are seeing a retailer facing lease commitments.Mall owners expect retailers to honour their leases.[And will go to court to make sure they do].Staff must be paid redundancies.and store fit-outs and fixtures become worthless.
With 186 stores I would think they face challenges.
We saw with Postie Plus, the only way forward was via putting the business into administration.

[Beagle]

Closing unprofitable stores can be a very expensive exercise.
Again we are seeing a retailer facing lease commitments.Mall owners expect retailers to honour their leases.[And will go to court to make sure they do].Staff must be paid redundancies.and store fit-outs and fixtures become worthless.
With 186 stores I would think they face challenges.
We saw with Postie Plus, the only way forward was via putting the business into administration.

You're on to it. They're in very deep doggy doo. It'll be interesting to see if Goldman's can help them come up with some creative solution but that'll probably involve asking shareholders to dig into their pockets and trust present management and directors to turn the Titanic around. A safer bet for shareholders would appear to be abandon ship now and save some of your own skin :eek2:
Does anyone on here shop at PP ? We have two cute granddaughters but haven't been in a PP store ever. I'm not sure what this says about my wife and I or the PP stores, just saying...

[winner69]

Closing unprofitable stores can be a very expensive exercise.
Again we are seeing a retailer facing lease commitments.Mall owners expect retailers to honour their leases.[And will go to court to make sure they do].Staff must be paid redundancies.and store fit-outs and fixtures become worthless.
With 186 stores I would think they face challenges.
We saw with Postie Plus, the only way forward was via putting the business into administration.

They got out of the USA leases a dew years ago by using Chapter 11 bankruptcy

Maybe try that trick again in other countries?

Or as Percy mentions do a Postie in NZ and start again.

Patch cheap as ...the shares that is .....not the merchandise .....but hope can be a strategy

[BlackPeter]

Does anyone on here shop at PP ? We have two cute granddaughters but haven't been in a PP store ever. I'm not sure what this says about my wife and I or the PP stores, just saying...

I know what you mean (despite having so far only one cute grand daughter ... you win;)). Have been a couple of times in one of the PPL shops to check them out (as potential buyer and investor), but found it never a worthwhile experience (though educational ...).

Having said that - last time I checked was probably 4 months ago. Hopefully (hoping for any remaining investors) they have changed by now to a better and flasher collection. However difficult to get the foot back into the door after some seasons of lousy (well - the stuff I've seen in winter looked bland and cheap) customer experience.

Discl: not holding;

[Beagle]

I know what you mean (despite having so far only one cute grand daughter ... you win;)). Have been a couple of times in one of the PPL shops to check them out (as potential buyer and investor), but found it never a worthwhile experience (though educational ...).

Having said that - last time I checked was probably 4 months ago. Hopefully (hoping for any remaining investors) they have changed by now to a better and flasher collection. However difficult to get the foot back into the door after some seasons of lousy (well - the stuff I've seen in winter looked bland and cheap) customer experience.

Discl: not holding;

I keep walking past the PP store in New Lynn here when I'm doing other shopping and honestly in years gone by there was HEAPS of colour and really interestingly designed clothes on display but in recent times it seems there's nothing in the window to draw people in. That's my perception for what its worth.

[Intel]

I know what you mean (despite having so far only one cute grand daughter ... you win;)). Have been a couple of times in one of the PPL shops to check them out (as potential buyer and investor), but found it never a worthwhile experience (though educational ...).

Having said that - last time I checked was probably 4 months ago. Hopefully (hoping for any remaining investors) they have changed by now to a better and flasher collection. However difficult to get the foot back into the door after some seasons of lousy (well - the stuff I've seen in winter looked bland and cheap) customer experience.

Discl: not holding;

If you want a true feel for the lack of customers Pumpkin Patch has, go to St Lukes Mall in a weekend/ public holiday. Cotton On kids is a few shops down from Pumpkin Patch and the few times I've been to the mall I noticed about 10x as many people in Cotton On Kids. Small sample set yet compelling nonetheless.

[gv1]

I keep walking past the PP store in New Lynn here when I'm doing other shopping and honestly in years gone by there was HEAPS of colour and really interestingly designed clothes on display but in recent times it seems there's nothing in the window to draw people in. That's my perception for what its worth.

Out of curiosity where do you shop for grandkids.


I think the holders should seriously think about selling if they have not sold out yet.

[QOH]

I happened to be in a Pumpkin Patch store yesterday, had probably only been in one years ago, and had thought they were sought after clothes.
Everything I saw yesterday just looked cheap crumpled material, still expensive, but looked like it was mass produced in huge numbers in China, totally disappointing, it reminded me of the old T&T
Shops.

[whatsup]

Closing unprofitable stores can be a very expensive exercise.
Again we are seeing a retailer facing lease commitments.Mall owners expect retailers to honour their leases.[And will go to court to make sure they do].Staff must be paid redundancies.and store fit-outs and fixtures become worthless.
With 186 stores I would think they face challenges.
We saw with Postie Plus, the only way forward was via putting the business into administration.

If that happens its a sad sad very sad day for all, shareholders and employees. but you cannot fart against thunder, yeh try but futile exercise !!

[percy]

If that happens its a sad sad very sad day for all, shareholders and employees. but you cannot fart against thunder, yeh try but futile exercise !!

What a great way you have with words?? !!
Made my day... lol.

[winner69]

Jeez 26 cents

Cheap at 80 cents, cheaper at 50 cents, really cheap at 40 cents, ridiculously undervalued at 30 cents and now just "cheap as" at 26 cents

[alliswell]

I sold out a few months ago at a lost, think their biggest problem is the clothes are just very very pricey for kids who will need clothes every 6-8 months, for most people I think its a place to go to buy nice clothes for a occasion, weddings/birthday etc not day to day items

[Chaowee88]

Jeez 26 cents

Cheap at 80 cents, cheaper at 50 cents, really cheap at 40 cents, ridiculously undervalued at 30 cents and now just "cheap as" at 26 cents

I went with my friend a few months back to the Patch store in St Lukes Mall, 2nd floor, she brought a couple of items.

The setting was OK, service ok but a bit slow.

In total there was 4 customers in the store including me and my friend at the time. Not exactly much foot traffic going through. It sad, but eventually PPL will go.

[bull....]

looks like the writing is on the wall

[Beagle]

Out of curiosity where do you shop for grandkids.


I think the holders should seriously think about selling if they have not sold out yet.

My wife does the shopping for presents for our grandkids which often includes clothes and they're 3 and 4 respectively. I think over the years she's mainly shopped at t and t. When they're so young they grow so quickly so she can't see the point in paying fancy prices for clothes that will only last 5 minutes so to speak.
I see they have a 1/2 price or less sale on now, gives you an idea of what PP are up against.

[okay]

In the infamous words of Cavalier chair Alan James, has Jane Freeman passed the "poison chalice" onto new Chairman Peter Schuyt, appointed 1 October? Janes departing words...
"Over the past year we've embarked on an important change and review process," Freeman said. "With the initial stage now complete, I feel that I can step aside confidently with the business positioned for the future."

[Beagle]

I agree and think a lot can be read into director resignations in recent times. Nobody looking to build their directorship credentials really wants to be on deck when the Titanic goes down...it's not a good professional look regardless of who really steered the thing into the iceberg in the first place.

[okay]

An astute winner69 mentioned of her departing phrase around the time, that she said "positioned" for the future, not "well positioned" lol.
Interestingly Non-executive director Maurice Prendergast ex CEO 1993 to 2011, chose the same day October 1 to retire. I assume like Jane he felt at the time he could step aside confidently as well.

[percy]

[QUOTE=okay;518979]An astute winner69 mentioned of her departing phrase around the time, that she said "positioned" for the future, not "well positioned" lol.
Well spotted.!!!!!!!!!!!!!!!!!!!!!!!!
History will record it was the final sell signal.!!!!!!!!!!!!!!!!!!!!!! lol.

[Beagle]

With 169m shares on issue and a present market cap of 44m at 26 cents and given their present debt level I think there only chance is a deeply discounted rights issue to try and shore up the ship and restructure the company. If they can find an underwriter / institution that still believes the PP story an underwritten 2 for 1 issue at say 10 cents would recognise the seriousness of the situation and have a chance of success and raise $32m.

[biker]

In the infamous words of Cavalier chair Alan James, has Jane Freeman passed the "poison chalice" onto new Chairman Peter Schuyt, appointed 1 October? Janes departing words...
"Over the past year we've embarked on an important change and review process," Freeman said. "With the initial stage now complete, I feel that I can step aside confidently with the business positioned for the future."

Yeah right. I can step aside confidently knowing If i jump ship now I wont be tarnished when it goes down.

[Chaowee88]

With 169m shares on issue and a present market cap of 44m at 26 cents and given their present debt level I think there only chance is a deeply discounted rights issue to try and shore up the ship and restructure the company. If they can find an underwriter / institution that still believes the PP story an underwritten 2 for 1 issue at say 10 cents would recognise the seriousness of the situation and have a chance of success and raise $32m.

Retail is a dirty industry now, who would be willing to burn more cash into this sad story, PPL only have themselves to blame for today as they were never prepared for such a retail hit. They obviously thought as long as we have the profit going we can ramp our debt up willy nilly.

In the words of starcraft gaming it "GG Pumpkin".

[Beagle]

Retail is a dirty industry now, who would be willing to burn more cash into this sad story, PPL only have themselves to blame for today as they were never prepared for such a retail hit. They obviously thought as long as we have the profit going we can ramp our debt up willy nilly.

In the words of starcraft gaming it "GG Pumpkin".

I wouldn't at any price but you never know if they can find some underwriter, (maybe the MD of said institution who is obsessed / blinded about buying cute PP outfits for his grandkids), who will underwrite the issue then you never know it might work. Other than that I guess a non underwritten deeply discounted rights issue at say 10 cents has some chance of limited success from the faithful few left... But honestly I'd say if we had a bookmaker making odds on which company will fail in 2015, PPL would be the hot favourite and CAV second favourite.
Thing is go onto the T and T website and as mentioned earlier they're selling absolutely everything just before Christmas for a minimum discount of 50%, often considerably bigger discounts. PPL management far too slow just like Cav's.
www.tandt.co.nz

[Chaowee88]

I wouldn't at any price but you never know if they can find some underwriter, (maybe the MD of said institution who is obsessed / blinded about buying cute PP outfits for his grandkids), who will underwrite the issue then you never know it might work. Other than that I guess a non underwritten deeply discounted rights issue at say 10 cents has some chance of limited success from the faithful few left... But honestly I'd say if we had a bookmaker making odds on which company will fail in 2015, PPL would be the hot favourite and CAV second favourite.
Thing is go onto the T and T website and as mentioned earlier they're selling absolutely everything just before Christmas for a minimum discount of 50%, often considerably bigger discounts. PPL management far too slow just like Cav's.
www.tandt.co.nz

Energy Mad is also another one fast losing hope with investors and on it last legs. I'd say PPL first, Mad second.

[BlackPeter]

With 169m shares on issue and a present market cap of 44m at 26 cents and given their present debt level I think there only chance is a deeply discounted rights issue to try and shore up the ship and restructure the company. If they can find an underwriter / institution that still believes the PP story an underwritten 2 for 1 issue at say 10 cents would recognise the seriousness of the situation and have a chance of success and raise $32m.

Do I sense there some irony? I thought they just went through an expensive restructure exercise, didn't they? And what did they do before that restructuring? From memory ... they restructured ... so you think they might get more experienced in doing it again?

[Beagle]

Do I sense there some irony? I thought they just went through an expensive restructure exercise, didn't they? And what did they do before that restructuring? From memory ... they restructured ... so you think they might get more experienced in doing it again?

LOL that's Gold mate :) Hits the nail perfectly on the head.

[winner69]

Jeez 26 cents

Cheap at 80 cents, cheaper at 50 cents, really cheap at 40 cents, ridiculously undervalued at 30 cents and now just "cheap as" at 26 cents

"Cheap as" at 26 cents

Wonder how we describe 24 cents

[winner69]

Jeez 21 cents

Belg would have got his average price down to sub 30 cents I reckon ..."the power of pyramids

[percy]

I wonder whether he will reappear once he has his average below 10.????

[h2so4]

I wonder whether he will reappear once he has his average below 10.????

A resurrection from a pyramid of this size would be a miracle.

[klid]

Big trade at $0.21! WHAT DOES IT MEAN?

[winner69]

Big trade at $0.21! WHAT DOES IT MEAN?

Belg getting really confident and buying even more ... that's how pyramids work ....and there was a distressed seller to help him out

One thing it wont be the independent directors buying .... some don't have any at all, yes zilch .... one even says he wants to remain truly independent so should own shares anyway. That says something about the confidence they have in this impending turnaround

[klid]

Thanks, didn't know that... temptation off. If the directors don't hold yeah that's a sign!

[winner69]

klid there was bit in the paper
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11365624

Why not buy?

Pumpkin Patch's board and senior management got a grilling from shareholders at Tuesday's meeting.

One asked why directors weren't taking advantage of the low share price and buying up stock.

It's a good question. If the directors have full confidence in the turnaround strategy, wouldn't they be viewing the share price as a steal?

In response, chairman Peter Schuyt said it wouldn't be appropriate for the board members to explain their intentions on shareholdings during the meeting.

"I'd be happy for you to ask, if you want to, after the meeting, individual directors as to their intent on shareholding," he said.

Schuyt, who joined the retailer's board in 2012 and took over as chairman last month, replacing Jane Freeman, told Stock Takes he generally doesn't buy shares in companies of which he is a director.

He doesn't hold any Pumpkin Patch stock.

"My personal theory is to remain completely independent," he said.

Schuyt also said Pumpkin Patch had three new directors, Luke Bunt, Bruce Cotterill and Josette Prince.

"There are three people who have only just got their feet under the table, so it's a bit unfair to suggest that at this point they should be buying up shares at a low price," he said. "Each individual director has their own financial position. They may or may not be in a financial position to invest in the company."

[sb9]

Looks like this one has got legs in the new year, up a bit in the first two of trading days, something up here....any clues, good Christmas sales perhaps??

[boofters]

jeepers Id be surprised , I went in to 2 stores ver the xmas break and almost cried. The decor , the music the stock was very tired IMO.

[BFG]

Looks like this one has got legs in the new year, up a bit in the first two of trading days, something up here....any clues, good Christmas sales perhaps??

Dead cat bounce. You have the honour of naming said kitty now :)

[Abacus]

I have been looking at investing in PPL too, so For me, foot research and gut feeling about the $ end of the business is as important as the FA. So during the last few months I saw people buying at: RMD, KMD, HLG, BRG. But in comparison, PPL stores are almost always deserted, or there are a few people 'kicking tyres' - I can almost see the tumbleweeds blowing past. Not only that but the staff seem really bored and unhappy in comparison to the staff in other stores. I may be wrong, but I wil be looking else where as I do not see value here- as my style is value investing...just my 2 cents.

[Beagle]

I have been looking at investing in PPL too, so For me, foot research and gut feeling about the $ end of the business is as important as the FA. So during the last few months I saw people buying at: RMD, KMD, HLG, BRG. But in comparison, PPL stores are almost always deserted, or there are a few people 'kicking tyres' - I can almost see the tumbleweeds blowing past. Not only that but the staff seem really bored and unhappy in comparison to the staff in other stores. I may be wrong, but I wil be looking else where as I do not see value here- as my style is value investing...just my 2 cents.

I agree mate. Every time I wander past the local PPL store at Lynmall it looks tired, the product looks dated and hardly anyone seems interested anymore. Seems like PPL is on a road to nowhere.
I've considered buying but the odds on losing 100% of one's investment are pretty high IMHO.

[sb9]

Couldn't agree more, looked at the stuff in St Lukes store during break, it does indeed look tired, boring and staff are one bit inspiring :(

[nextbigthing]

From what I'm reading on this thread, this company sounds perfect for someone with a bit of know-how to come in and turn it around.

[percy]

From what I'm reading on this thread, this company sounds perfect for someone with a bit of know-how to come in and turn it around.

Will not happen.
The fizz is out of the bottle.
GONE.

[BFG]

From what I'm reading on this thread, this company sounds like the perfect short for a 100% gain wgen it hits the big fat donut. LOADING UP TO THE GUNWALES WITH SHORTS :D :D :D
There we go, fixed for ya :)

[Beagle]

There we go, fixed for ya :)

:lol: Nice one mate.

[h2so4]

Will not happen.
The fizz is out of the bottle.
GONE.

It's almost midnight and there is no prince on board.

[percy]

It's almost midnight and there is no prince on board.

Walked past PPL store at Northlands this morning.
Would appear they have given up trying to sell children's clothing, as their window was full of balloons.!!

[h2so4]

Walked past PPL store at Northlands this morning.
Would appear they have given up trying to sell children's clothing, as their window was full of balloons.!!

I stand corrected its 9.30am. Were there any pumpkins in there?

[Baddarcy]

Interesting comment in this morning announcement

"Capital Initiatives

At the last Annual Meeting the company advised the market that it was
undertaking a capital review. Since that time certain third parties have
proactively indicated their interest in Pumpkin Patch.

The Board believes it is in the Company's interests to seek formal proposals
in respect of either an acquisition of the Company or in respect of
recapitalisation.

Goldman Sachs has been engaged to advise the Company. The Board has
established a Sub-committee of independent Directors to evaluate proposals.

Further announcements to the market will be made if any proposal received
represents a realistic option for the Company."

[winner69]

Nothing like talk of a takeover to get things moving.

Obviously all too hard for us ......need to give somebody else a go. Is that the message?

[Baddarcy]

Nothing like talk of a takeover to get things moving.

Obviously all too hard for us ......need to give somebody else a go. Is that the message?

Sounds a bit like it.

PPL could be of value to someone with an existing supply chain where they could remove some of the cost from the PPL business by combining supply chains.

[neyney2010]

Sounds a bit like it.

PPL could be of value to someone with an existing supply chain where they could remove some of the cost from the PPL business by combining supply chains.

Doesn't matter what happens. The brand is farked.

[Baddarcy]

Doesn't matter what happens. The brand is farked.

Interested to know your reasoning behind your comment please?

[neyney2010]

Interested to know your reasoning behind your comment please?

No proper reasoning. Just my own perception.
My wife and I have been buying from their stores for a few years, but their product (price and quality) do not stand out from say Farmers or another kid's shop across the mall. Half price or 30% off for 11 months of the year is just becoming the norm.

[macduffy]

As a Briscoes shareholder I hope that rumours of Rod Duke's possible interest in PPL are wide of the mark. If anyone can overhaul the management of this company it would be RD but I doubt that his talents extend to the nuances of childrens' fashion?

The other big question mark for me hangs over PPL's contingent liability for rentals on their expensive mall shops. Has this ever been quantified in terms of cost and term?

[Baddarcy]

No proper reasoning. Just my own perception.
My wife and I have been buying from their stores for a few years, but their product (price and quality) do not stand out from say Farmers or another kid's shop across the mall. Half price or 30% off for 11 months of the year is just becoming the norm.

Thanks for that. We also buy a fair bit from PPL, but almost all of it online, and like you, only on sale. Personally i think PPL is trading ok (as well as any other retailer, bar Briscoes which just outperforms), the biggest problem is all of the debt and the cost of servicing it, they just don't make enough money to service the debt.

[kizame]

As a Briscoes shareholder I hope that rumours of Rod Duke's possible interest in PPL are wide of the mark. If anyone can overhaul the management of this company it would be RD but I doubt that his talents extend to the nuances of childrens' fashion?

The other big question mark for me hangs over PPL's contingent liability for rentals on their expensive mall shops. Has this ever been quantified in terms of cost and term?

I Don't think his talents would need to extend to childrens fashion,if he got the right people for the key positions,and started taking leases near briscos and rebel in this country,obviously off shore would be the real challenge, maybe closing stores and supplying specialty chains with product,it's difficult,but if anybody could,he could.

[kizame]

Interestingly he still owns Living and Giving,are there many of these stores open? this would have to be one of the most challenging retail divisions surely,gift shops have so much competition.

[winner69]

As a Briscoes shareholder I hope that rumours of Rod Duke's possible interest in PPL are wide of the mark. If anyone can overhaul the management of this company it would be RD but I doubt that his talents extend to the nuances of childrens' fashion?

The other big question mark for me hangs over PPL's contingent liability for rentals on their expensive mall shops. Has this ever been quantified in terms of cost and term?

Last Annual Report

Commitments for minimum lease payments in relation to non cancellable operating leases are payable as follows - TOTAL $101 MILLION

Remember they got out of many US commitments a fe years ago by going into Chapter 11,

[Beagle]

Last Annual Report

Commitments for minimum lease payments in relation to non cancellable operating leases are payable as follows - TOTAL $101 MILLION

Remember they got out of many US commitments a fe years ago by going into Chapter 11,

Too much debt and too many really expensive leases do not make for a tasty cocktail for business success.

[golden city]

if somebody willing to takeover ppl..., at what price.., any one will have any guess of

[percy]

if somebody willing to takeover ppl..., at what price.., any one will have any guess of

Read the two previous posts,and figure out how you would feel, taking over a very poor performing business, with a lot of debt, plus $101 mil non cancellable operating leases.Would give anyone a very bad headache.
Then you would have to ask the question,why bother?

[Baa_Baa]

Read the two previous posts,and figure out how you would feel, taking over a very poor performing business, with a lot of debt, plus $101 mil non cancellable operating leases.Would give anyone a very bad headache.
Then you would have to ask the question,why bother?

A good point percy, though one mans trash is another mans treasure.

There is no rule against buying the company for the retail footprint, pulling the lame products off the shelves and replacing it with something people want to buy .. instant expansion. You'd want a hefty discount considering the stock is therefore worthless.

Just a thought. I'm saying we can't assume a suitor would buy a lame duck for it's product line. There's more value in the business than stock.

BAA

[Beagle]

Just buy it off the receivers in due course without the hefty lease commitments and debt. In my opinion Its really only the brand name that has genuine value because its been around for ages.
Then re-jig / refresh the product line, make it mainly online with a few strategically located suburban stores in modest rent area's and bob's your uncle. Retail 101 for 2015 and beyond.
Anyone noticed Fishing Camping and Outdoors closing down for good. Kathmandu struggling, Cavalier at death's door...the world is changing.

[Baddarcy]

PPL makes big losses doesn't it?

No it doesen't. PPL is profitable, PPL's problem is that all the money it does make goes on interest payments on the $50m of debt they are carrying.

Get rid of the debt and it wouldn't be too bad a company.

Sales in the last 6 month = $121m
Gross Proft in the last 6 months = $65m
Net Cash FLow in the last 6 months = $14m

Then there is the below comments from the half year report, which indicates they agree with the $101m in lease commitments being out of hand and they are attempting to do something about it.

MORE APPROPRIATE RETAIL FOOTPRINT
o The business has commenced a project to “right-size” the overall retail network, predominantly in
Australia, and to eliminate non-profitable stores
o The business has confirmed closure dates for 9 stores in the second half of FY15. Furthermore,
substantial rental savings have been successfully renegotiated at another 2 stores transforming these
marginal stores into profitable stores
o Discussions are continuing with landlords to investigate mechanisms to improve the financial
performance of more stores

I am of course glossing over all the bad stuff like the $1m in reorg costs and the $2.5m in interest payments and the $6m in one off admin costs (what ever they are). But my point is that there is some potential in this dog me thinks.

[winner69]

Today

Pumpkin Patch Limited (PPL) – HY15 Supplementary announcement

Following the release of its half year result on Friday 20th March, the PPL board notes that there has been significant upwards movement in the share price.

The board wishes to confirm that the process of seeking formal proposals in respect of either an acquisition of the company or recapitalisation has only just commenced and no conclusions should be drawn at this stage concerning whether any transaction would result or whether the value of any transaction would be more or less than the market price prior to the release of Friday's announcement.
Peter Schuyt
Chairperson
Pumpkin Patch Limited
23 March 2015



Think they saying that maybe getting a $100m for it in its current state is well just 'pure speculation'

Probably regretting saying what they did on Friday.

Hope is a strategy of course.

[winner69]

Badarcy - they tout fantastic working capital management as one of the main drivers of improved H1 cash flows ....compared to H1 last year

Current working capital doesn't look too flash compared to six months ago though.

[Baddarcy]

Badarcy - they tout fantastic working capital management as one of the main drivers of improved H1 cash flows ....compared to H1 last year

Current working capital doesn't look too flash compared to six months ago though.

Lets be honest, nothing looks too flash about PPL, but a little bit better than it did in the previous period IMHO.

They repaid a $13m loan in the period which is why cash on hand is lower at the end of the period.

[winner69]

Lets be honest, nothing looks too flash about PPL, but a little bit better than it did in the previous period IMHO.

They repaid a $13m loan in the period which is why cash on hand is lower at the end of the period.

But what they owe creditors has gone up a fair bit. That helps

[tim23]

Hi - can a chart expert tell me if a chart predicted Fridays rise? (wish I had bought some around 20c but bought KMD instead!)

[Baddarcy]

But what they owe creditors has gone up a fair bit. That helps

Not really ;-) But overall liabilities has gone down from $98m to $91m in the last 6 months.

[Beagle]

I am of course glossing over all the bad stuff like the $1m in reorg costs and the $2.5m in interest payments and the $6m in one off admin costs (what ever they are). But my point is that there is some potential in this dog me thinks.
You called it by its proper name. Surprises me that the flea powder they're using costs so much ????

[dodgy]

Hi all
I sold out recently after 3 tries (all unsuccessful) to get someone from head office to ring me , a shareholder, after receiving a complaint from a retail staff member about always being kept in the dark by management and me wishing to follow up. Bad results always come from poor management in my opinion - why risk it ? Still waiting.
Good luck with this one.
-dodgy

[Baddarcy]

You called it by its proper name. Surprises me that the flea powder they're using costs so much ????

Suspect it could be the quantity required rather than the unit cost ;-)

[Baddarcy]

You called it by its proper name. Surprises me that the flea powder they're using costs so much ????

Suspect it could be the quantity required rather than the unit cost ;-)

[pennyacw]

I don't think the recent rise for PPL is going to hold. The restructure of the business is far from complete, their CEO has even admitted this. I have looked at a bunch of stores over the summer and there has been none that look as though they have any signs of growth. In addition the trading volumes that, have influenced the recent price recovery, are fairly low. So it does not give one much comfort over investor/market confidence in the stock.

The business has a lot of work to do to finish off their restructuring process. Therefore, it is more of a specualtion play than an investment opportunity; it is really the potential for an acquisition that is driving any price increase. Usually with restructuring investment bets there is still opportunity to get good gains after the recovery of the company is evident - which we haven't come close to yet.

I am going to be sitting and waiting for this opportunity, rather than risk my money on a company with limited earnings yield and far from ideal return on capital. 12 months from now I think we will know whether there is a good investment opportunity or not.

[winner69]

Bella sums it up nicely. Would like patch to be great / relevant again but I get the impression it won't under current management.

As she says But how critical and brutally honest have they been about what's inside the organisation? Is it all because of the recession or have they simply stopped making products that people want to buy? ....and the end game My gut feel is this would mean a total product redesign, smaller stores, hugely consolidated product lines, slightly higher prices but a complete experience that justifies that. Young designers and illustrators producing new looks and limited edition runs of beautiful clothing for kids. Quality fabrics and quality production. Unique collaborations with funky young brands like I Love Ugly.

Current shareholders are stuffed I reckon unless this white knight in shining armour comes along with $100m plus pretty quick to take over. I understand Mr Lew has been poking around but if he was interested methinks if he was interested things would have happened by now

Anyway read Bellla

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11422877

[winner69]

Pumpkin could learn a lot from these guys at Cotton On
http://www.theage.com.au/business/retail/cotton-on-the-inside-story-of-the-retailers-rise-to-15b-in-revenue-20150402-1m8e67.html

A couple of extracts

It has a singular focus on every day, edited basics that are fashion focused at an exceptional price and quality. It's a relatively young and determined company who have no set boundaries and who know their customer intimately."

"They bring quality products to the market at the cheapest possible price and their supply chain and sourcing strategies are critical to them being able to offer the value proposition they offer in their stores. Their stores are relatively inexpensive to put together so the capital investment is not very high and their pay back period is very fast."

[percy]

Winner69.
Thanks for the link.Incredible story.

[winner69]

Winner69.
Thanks for the link.Incredible story.

Just shows you what can be done eh. Seems many successful retailers have owners who stay with the business and nature it along.

Pumpkin for one did well under the founder Sally but when the academics and the money men got involved it all started falling to go downhill. Hallensteins much the same with the likes of Popplewell guiding it along. How long as Rod been at Briscoes, whoops I forgot it is his company.

That article on Cotton On just highlights how bad the likes of pumpkin and Kathmandu really are, or just how good they should be.

[Xerof]

Yep, not a patch on them, and won't ever cotton on

[luigi]

Pumpkin Patch rates top on Australian shopper survey
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11440707

[winner69]

pumpkin unloved and unwanted

management to plod on and turn this around

https://www.nzx.com/companies/PPL/announcements/265303

[Crackity]

Cash issue at some point this year methinks...

[Beagle]

pumpkin unloved and unwanted

management to plod on and turn this around

https://www.nzx.com/companies/PPL/announcements/265303

I'm going to go out on a limb here and simply call this as nobody thought the company could be successfully turned around. I suspect they will stumble along trading at the behest of their bankers and try and dramatically reduce their stock and debt. I doubt there is any appetite for a cash issue with N.Z. investors who for genuine and completely valid reasons have totally lost confidence in the board and management. I think, at best this company stands a 50% chance of still being listed in 18 months time.

Almost identical situation for CAV. Tired old products that are simply unappealing at their price point any longer, mixed in with inept management, poor governance, extremely poor stock control and too much debt.

Anyone contemplating investing in either of these tired old flea ridden, beaten down, lame and mangy dogs needs to know this is a binary situation, Heads the dog will struggle along form many years and maybe one day in the long distant future revert to something of a meaningful operation and tails, the bank puts the dog(s) and everyone else out of their misery.

I think you'd be better off down at the Casino betting on either red or black on the Roulette wheel, at least your bet is not hampered by inept management and you have about a 48% chance of winning which is probably far better odds than for either of these stocks.

[Crackity]

I'm inclined to agree Roger but I think their bankers may try to force the cash issue on them / I'm thinking Fletcher Forests sort of carnage.....

[axe]

I'm going to go out on a limb here and simply call this as nobody thought the company could be successfully turned around. I suspect they will stumble along trading at the behest of their bankers and try and dramatically reduce their stock and debt. I doubt there is any appetite for a cash issue with N.Z. investors who for genuine and completely valid reasons have totally lost confidence in the board and management. I think, at best this company stands a 50% chance of still being listed in 18 months time.

Almost identical situation for CAV. Tired old products that are simply unappealing at their price point any longer, mixed in with inept management, poor governance, extremely poor stock control and too much debt.

Anyone contemplating investing in either of these tired old flea ridden, beaten down, lame and mangy dogs needs to know this is a binary situation, Heads the dog will struggle along form many years and maybe one day in the long distant future revert to something of a meaningful operation and tails, the bank puts the dog(s) and everyone else out of their misery.

I think you'd be better off down at the Casino betting on either red or black on the Roulette wheel, at least your bet is not hampered by inept management and you have about a 48% chance of winning which is probably far better odds than for either of these stocks.

They still have Rod Duke. If you look at BGR's history where others saw a lame mangy dog Rod saw potential and gave BGR the care it needed to be "best in breed"
I still give them a fighting chance while he is around.

disc: do not hold

[winner69]

They still have Rod Duke. If you look at BGR's history where others saw a lame mangy dog Rod saw potential and gave BGR the care it needed to be "best in breed"
I still give them a fighting chance while he is around.

disc: do not hold

You saying Rod will buy patch then?

But Rod already admitted he knows little about designing and making stuff but he bloody good at buying and selling stuff 9except patch shares ha ha)

its the designing and making that's broken - rod cant fix that

But you never know, something weird like Rod and Jan getting together to do something could be possible

But I think patch is a relic of bygone days

[winner69]

Salt Funds love them .... maybe they have the answer

[Beagle]

They still have Rod Duke. If you look at BGR's history where others saw a lame mangy dog Rod saw potential and gave BGR the care it needed to be "best in breed"
I still give them a fighting chance while he is around.

disc: do not hold

Maybe but at least at the Casino you get a quick and clean death...but as you say maybe he can apply radical health treatment and on a wing and a prayer turn it around. Miracles have been known to happen :)

Good luck finding an underwriter for any cash issue....

Pumpkin Patch isn't a patch on what it used to be eh W69...yes I know its a weak and lame pun but couldn't resist :)

[Crackity]

winner 69 has a sub underwriter above....i think a broker would take on a heavily dilutive cash issue if they could offload most of the risk to interested parties such as Salt and Mr Duke. Time will tell....

[axe]

You saying Rod will buy patch then?

But Rod already admitted he knows little about designing and making stuff but he bloody good at buying and selling stuff 9except patch shares ha ha)

its the designing and making that's broken - rod cant fix that

But you never know, something weird like Rod and Jan getting together to do something could be possible

But I think patch is a relic of bygone days

Not saying that Rod will buy them out. I am saying that there if there is potential one person who could spot (dog joke intended) that potential is Rod

[winner69]

This thread following what happened on this thread ..... http://www.sharetrader.co.nz/showthread.php?253-THE-KING-buys-POSTIE-PLUS&highlight=Ppg


.......plenty of similarities.

Will the outcome be the same?

Worth skimming through quickly if one thinks that for patch this time is different

[winner69]

Bankers use things like Altman Z scores but probably more sophisticated models these days to assess credit risk and probability of default.

But any banker worth his salt would have a quick look at the patch accounts then visit the warehouse and take a look at a shop and say 'its rooted'. Underlings then do the process thing and run their models and confirm the prognosis just for completeness sake and tell the boss 'it is rooted'

Altman Z score from recent accounts and being generous about this years EBIT is about 2.4

The book says - Z-SCORE BETWEEN 1.8 and 2.7 – Good chances of the company going bankrupt within 2 years of operations from the date of financial figures given.

Nearly every time I have posted these low scores the inevitable has happened. The exception being Hellaby but then they knew what was wrong and fixed it pronto.

[winner69]

Winner I love the Altman Z score thanks for putting people onto it. I think your interpretation is wrong though, 1.8-2.7 is grey area and less than 1.8 is predicting bankruptcy in the next 12 months.
Altman Z has proven 80% accurate when predicting default according to wikipedia, sometimes a company predicted bankrupt can survive.

To make life easier I cheated and used an online calculator at creditguru.com

Here's their interpretation of results

The Interpretation of Altman Z-Score:
Z-SCORE ABOVE 3.0 –The company is considered 'Safe' based on the financial figures only.

Z-SCORE BETWEEN 2.7 and 2.99 – 'On Alert'. This zone is an area where one should 'Exercise Caution'.

Z-SCORE BETWEEN 1.8 and 2.7 – Good chances of the company going bankrupt within 2 years of operations from the date of financial figures given.

Z-SCORE BELOW 1.80- Probability of Financial embarassment is very high.

Back to the Z Score Page at Credit Guru

My interpretation of 2.4 is 'its rooted'

[winner69]

Winner I love the Altman Z score thanks for putting people onto it. I think your interpretation is wrong though, 1.8-2.7 is grey area and less than 1.8 is predicting bankruptcy in the next 12 months.
Altman Z has proven 80% accurate when predicting default according to wikipedia, sometimes a company predicted bankrupt can survive.

Some do - if they realise the situation is dire and do something about it. Generally means fix the balance sheet (usually debt / working capital the problem) and change how one does business (ie make more money. The important thing to realise is that time is generally your friend in these circumstances (nor is hope a strategy)

Hellaby was a great example of being in dire straits and fixing things quickly and now one of the stars of the NZX

[Crackity]

Z = 1.2 X1 + 1.4 X2 + 3.3 X3 + 0.6 X4 +1 X5where
X1 = Working Capital / Total Assets
X2 = Retained Earnings / Total Assets
X3 = EBITDA / Total Assets
X4 = Market Value of Equity / Total Liabilities
X5 = Net Sales / Total Assets
Here are the rules for interpreting the Altman Z score.


When Z is >= 3.0, the firm is most likely safe based on the financial data.
When Z is 2.7 to 3.0, the company is probably safe from bankruptcy, but this is in the grey area and caution should be taken.
When Z is 1.8 to 2.7, the company is likely to be bankrupt within 2 years.
When Z is <= 1.8, the company is highly likely to be bankrupt.


Or something like this!

[winner69]

Munted might be a better word than rooted

Patch is munted sounds better anyway

But what are the patch guys and gals going to do about it?

[winner69]

These scores only take the financials as they stand at a point in time and give some idea of the likelihood of default.

Fixing it is easy just recapitalize.

But to assess the future is getting a feel for whether the business is actually viable going forward. Thus one of the key inputs into a modern day model is including a factor that includes such things as the company offer, market relevance, customer perception, good or bad press, robust enough to change, etc.

I still feel that with patch that modern day banker would say 'its rooted' but we manage the account to minimise our potential losses.

[winner69]

Goodness gracious, 10 kicked the tyres and walked away. Either patchthas illusions of grandeur and full of hope or those 10 were just vultures looking for a bargain. Takes ou pick.

No 'silver bullet' says Chairman

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11460719


Percy, do you think the landlords will play ball and help them out?




http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11460719

[winner69]

Salt Funds might love patch but the guy from JB Were is more realistic and uses that nice term 'wiggle'


Rickey Ward, New Zealand equity manager at investment firm JBWere, said it would be difficult for Pumpkin Patch to "trade its way to a better outcome" in a tough retail market.

The company's debt levels meant there wasn't a lot of "wiggle room" if trading conditions took a turn for the worse, Ward said.

[Xerof]

He should have said 'squiggle', then I might have understood him:D

[winner69]

Well Fridays little surprise given a few the frighteners

Salt picking up the dribs and drabs or another round of vultures

Belg tales about vultures at 50 cents .....jeez that seems so long ago.

[Crackity]

Shall I state the obvious Winner? Ok I will - the bank lenders have to be getting nervous as the share price declines.....there is ( from 2014 annual report in July) 25 million due for repayment on 30 Sept 2015 and 50 million due for repayment on 29 Feb 2016 ( an interesting date - must check next years calendar). hmmmm.....

[winner69]

Shall I state the obvious Winner? Ok I will - the bank lenders have to be getting nervous as the share price declines.....there is ( from 2014 annual report in July) 25 million due for repayment on 30 Sept 2015 and 50 million due for repayment on 29 Feb 2016 ( an interesting date - must check next years calendar). hmmmm.....

Must have paid some off .....only 53m as at half year last

[Crackity]

The "no Krispies" with morning tea must be working for them! 53 million does sound better than 75....

[JayRiggs]

PPL CEO Resignation 11:02am, 11 Jun 2015 | OFFICE Di Humphries steps down as Pumpkin Patch CEO
Di Humphries has tendered her resignation to the Pumpkin Patch Board, effective from 4 November, the company’s chair Peter Schuyt announced today.
He added that Di has advised the board that she is committed to the business through to her final date with Pumpkin Patch and will then focus on her future career goals.
Di noted that she had enjoyed her role of putting in place the changes necessary to stabilise and create a competitive business.
“I believe now is an appropriate time for a new CEO to take the company through the next stage of the business improvement process,” she said.
“Good progress has been made on product design, supply chain improvement, brand positioning and laying the foundations for the business transformation program. A continued focus on these areas remains critical to the ongoing improvement of the Company,” she added.
Peter Schuyt thanked Di for her service over the last two years, and paid tribute to the progress made under her leadership, which is starting to show in the improvements in the underlying retail performance of the business and the balance sheet in terms of inventory and debt levels.
“Di inherited a company that required, and still requires, major changes across all parts of the business. Those changes have progressed in a very demanding and challenging business environment and we want to acknowledge the huge commitment that Di has made, and continues to make, to the role of CEO and the Company,” said Peter Schuyt.
He added that the Board is now engaged in the process of finding a replacement CEO.

-ends-
Peter Schuyt
Chairman
Pumpkin Patch Limited

Di Humphries throwing in the towel after barely 2 years in the job.
With the recent announcement of Pumpkin rejecting all buyer offers, I'm speculating Di wasn't happy with the board's decision and she's walking out.

[Beagle]

Di Humphries throwing in the towel after barely 2 years in the job.
With the recent announcement of Pumpkin rejecting all buyer offers, I'm speculating Di wasn't happy with the board's decision and she's walking out.

Bit like Veritas eh...different rat jumping from a different ship...everything else pretty much the same with both companies up against it in a big way.

[winner69]

Di Humphries throwing in the towel after barely 2 years in the job.
With the recent announcement of Pumpkin rejecting all buyer offers, I'm speculating Di wasn't happy with the board's decision and she's walking out.

Probably was hoping for a big payout from the new owners ......bugger

[klid]

Hmm... 20c, I kind of want some! I last bought some Aug-Sept '13 - lucky I sold shortly after.

[okay]

Jane Freeman and Di Humphries famous departing quotes...

JF Appointed Chairman 4/3/11 share price $1.25

JF: "Over the past year we've embarked on an important change and review process," Freeman said. "With the initial stage now complete, I feel that I can step aside confidently with the business positioned for the future."

JF Resigns effective 1/10/14 share price $0.42

DH: Appointed CEO 27/8/13 share price $0.92

DH: she had “enjoyed” making changes necessary to stabilise the business and make it competitive again.“I believe now is an appropriate time for a new CEO to take the company through the next stage of the business improvement process,” she said.

DH share price "after stabilising the business", before it's next stage of "improvement" ... $0.20

[winner69]

And when Cowie left in July 2013

Pumpkin Patch's Chairperson, Jane Freeman, said "Neil has made a significant
contribution to the Company in his six years with us, especially during the
last two years as CEO as he guided the business through a significant period
of change. On behalf of the Board of Directors and the entire Pumpkin Patch
team I wish him well for the future."

Jeez wonder what happened to the share price during his time as CEO?

[winner69]

She also said this when Cowie left that they had well qualified internal candidates to fill the CEO

Well that didn't eventuate either

[okay]

Yeah..

Jane Freeman said at the time of appointment... Humphries was an extremely strong internal candidate for the CEO role who has had a "huge impact" on the business since joining Pumpkin Patch in 2012.

Di had been doing great things since 2012 supposedly, leading the design and brand strategies as the company's Merchandise and Brand Director..

[winner69]

With Briscoes and Rod more interested in Kathmandu sort of signals pumpkin might be a real dog ( in rods eyes anyway and wondering why he ever took a stake)

[Harvey Specter]

With Briscoes and Rod more interested in Kathmandu sort of signals pumpkin might be a real dog ( in rods eyes anyway and wondering why he ever took a stake)Or maybe they are next?

[Gunny]

Perhaps we can get HLG to buy out PP for a song and let their Management sort it out or is it just too late?

Gunny

[Xerof]

Ooh oh, Rod's gone. Impey not renewing his ticket. Internal MD appointment. Currency 'headwinds' to the downside now - it used to be currency headwinds to the upside

must be a steal at 10 cents......

[Harvey Specter]

Ooh oh, Rod's gone. Impey not renewing his ticket. Internal MD appointment. Currency 'headwinds' to the downside now - it used to be currency headwinds to the upside

must be a steal at 10 cents......BRG will offer 15c when the get there :)

[Scooter]

BRG will offer 15c when the get there :)

Well, would think differently on this, if Rod had stayed, I would have guessed he might be interested, but with him now exiting stage left, I would think his insight to this company is one of horror

[Nasi Goreng]

It could be or maybe all those non profitable stores could be a) re-branded or b) maybe Briscoes could have more sway re-negotiating contracts with Westfield. If it were not for the mall contracts they have in place, PPL would be seen in a completely different light. They have made profit despite the loss making sides of the business.

[Xerof]

Scooter, I agree, he's had time to assess, and has chosen KMD for expansion. Outa there, with a credible but transparent excuse

[JayRiggs]

The company confirms previous guidance in respect of the current financial year of normalised EBITDA in the order of $14.0 million. Transformation and financing costs will take this to a modest reported loss on an after tax basis.

I would really like to know what all these transformation and financing costs are. They really haven't gone into specifics regarding this whole transformation process. At the annual meeting last year, they talked about it, but it was so general and nothing specific.... except for shutting stores down.

[winner69]

The $14m normalised EBITDA for F15 is a shocker

But normalised EBITDA for FY 16 is likely to be significantly below that forecast
for FY 15.

Jeez - that suggests no profit at all next year despite the transformation etc

I reckon the patch business model is broken, probably munted

Positive discussions with the bank .... yeah right

[Beagle]

The $14m normalised EBITDA for F15 is a shocker

But normalised EBITDA for FY 16 is likely to be significantly below that forecast
for FY 15.

Jeez - that suggests no profit at all next year despite the transformation etc

I reckon the patch business model is broken, probably munted

Positive discussions with the bank .... yeah right

Hits the nail on the head. Effectively they're trading at the behest of the bank who are basically looking to extricate themselves with the minimum possible loss. This only goes one way from here...
No way everyone escapes from this complete mess smelling of roses.

[okay]

Looks like Schuyt has been stuck with the violin as all and sundry around him make their excuses and scramble off the tilting ship.

[Crackity]

Shall I blow my own trumpet now.... Toot toot - post on 8 June...

Shall I state the obvious Winner? Ok I will - the bank lenders have to be getting nervous as the share price declines

[Arbroath]

IMHO they'll be very lucky to still be trading by the end of FY16...odds are they go the same way as PPG



Shall I blow my own trumpet now.... Toot toot - post on 8 June...

Shall I state the obvious Winner? Ok I will - the bank lenders have to be getting nervous as the share price declines

[Xerof]

Shall I blow my own trumpet now.... Toot toot - post on 8 June...

Shall I state the obvious Winner? Ok I will - the bank lenders have to be getting nervous as the share price declines

haha, you mean you'll play the last post.....bit late laddie, some on here tried to get ol' Belg out above 60 cents, instead he kept pyramiding in longer, but eventually bottled