Pumpkin Patch will have 203 stores open by the end of next year, says Greg Muir. Picture / Kenny Rodger
Pumpkin Patch will have 203 stores open by the end of next year, says Greg Muir. Picture / Kenny Rodger
KEY POINTS:
Pumpkin Patch has spelt out its expansion plans, saying it will open 35 stores next year.
Executive chairman Greg Muir said expansion in all four of its markets - New Zealand, Australia, Britain and the United States - reflected strong prospects for the company, which makes a designerrange of children's clothing.
Pumpkin Patch had 84 stores in 2003 and will have grown to 168 by the start of next year. It estimates it will have 203 stores by the end of next year.
But Muir said the company was taking a careful approach and there was no danger that Pumpkin Patch was growing too fast.
He told around 130 shareholders at the annual meeting in Auckland yesterday this had been a "very strong" year and the retail and wholesale operations were poised for more growth.
The environment in Australia and New Zealand, with 89 and 49 stores respectively, had been "challenging".
But he was upbeat about Britain, with 23 stores - which went into profit last year for the first time - and the US, which had gone from one store last year to seven this year.
Under its revised expansion plans for those countries, the company expected to have 19 stores in US malls by the end of next year and was investigating new sites in Arizona and Texas.
"Although we are seeing good signs from the developing United States and UK retail markets, and wholesale markets, we will continue to follow the same strategy of thorough investigation and testing of new markets.
"That will be followed by measured expansion if and when we can generate long-term sustainable growth in those markets."
He cautioned that the expansion would not provide an immediate boost to profits.
"Although we have signalled our increased confidence in the UK and US markets and said we have planned to speed up the rollout, you will not see significant earnings growth in these markets in the short term.
"Store opening costs and other local market development costs will mask the underlying trading results in new stores."
He said the company had at one time considered the prospects for an even more rapid roll-out but had decided to a take a slower, more consistent approach.
The company's shares closed yesterday unchanged at $4.10.
