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Postie Plus Group is talking with two potential buyers for its 25 Arbuckles stores as it prepares to announce a $2.8 million loss for the six months to January 31.
It is understood that the Arbuckles chain did not make a profit.
Chairman Peter van Rij said the Arbuckles chain had had a difficult time fitting into the group's stable of brands, which includes Postie Plus and Baby City.
Van Rij said the company had talked to "interested parties" who approached the company in January.
He said that Arbuckles was for sale "at the right price" and part of the value for the company was in the leases that it held.
There was heavy competition for manchester retailing from the Warehouse Group, Farmers and Briscoe Homeware, he said.
Some retailers were using manchester as a loss leader to attract customers and that had affected the profitability of Arbuckles, van Rij said.
Meanwhile, chief executive Ron Boskell said the company was forecasting a $2.8 million loss for the six months to January 31 compared to $500,000 for the same period in 2007.
Boskell said the company had suffered from stock management problems which had been "like a running sore" at the company.
The company was predicting it would end the year to July 31 with a $2 million profit compared with $2.5 million for the 12 months to July 31 last year.
Postie Plus had faced full stock levels, flat sales and lower margin as a result of difficult trading conditions.
The group confirmed yesterday it is moving its Westport warehouse operation to Christchurch, affecting 33 jobs.