Pumpkin Patch Extends Gain After Exiting U.K. Retail Operation
Pumpkin Patch Ltd. (PPL), a New Zealand children’s clothing retailer, is headed for the best two-day gain since June 2009 in Wellington trading after placing its U.K. unit in administration.
The decision follows a review of the loss-making unit that owns 36 stores, Auckland-based Pumpkin Patch said yesterday, The stock rose 6.7 percent as at 10:35 a.m. following a 7.1 advance yesterday. The 14 percent, two-day gain is the best since June 30, 2009.
“It just doesn’t make sense for us or our shareholders to continue to maintain the existing operation up there,” Chief Executive Officer Neil Cowie said in a statement yesterday. “The economic environment in the United Kingdom and in wider Europe is extremely difficult and we believe it is going to get worse before it gets better. Therefore we expect the U.K. operation would continue to make losses for some time to come.”
While there will be cash costs and a charge against shareholders funds in the six months ending Jan. 31, the elimination of U.K. losses will improve earnings in the second half ending July 31, and in the future, the company said.
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