New Zealand apparel retailer Postie Plus has been placed in voluntary administration under the weight of financial woes.
The company, which had been plagued by trading losses for some time, has appointed David John Bridgman and Colin Thomas McCloy of PricewaterhouseCoopers as administrators of the company.
As previously reported on ragtrader.com.au, the company confirmed a significant net loss for 2013, and released a grim business overview as part of its full year results presentation.
Commenting on its decision to appoint administrators, the Postie Plus board revealed it had made considerable efforts to recapitalise the company, attract a new major cornerstone shareholder, or to sell the company outright.
“The board has not been able to find a party to immediately inject a substantial amount of new capital. The board has therefore determined that the company cannot continue to carry on its business.
“The board has therefore decided that the best results for stakeholders can be achieved by appointing administrators under part 15A of the Companies Act. This will enable the business to continue trading during the sale period so negotiations can continue for it to be sold as a going concern.”
Postie Plus also detailed that the company has “suffered a loss of market share and has incurred trading losses. In addition to these losses further substantial consequential losses have been suffered”.
“Despite restructuring, optimising of the existing DC and recent improvements to gross margin and market share, the company has continued to make ongoing trading losses. The company's bank has been supportive through this period, but has decided it cannot extend its facilities further to cover ongoing losses.”
Going forward, the company said it has commissioned expert legal advice as to its ability to recover compensation and, has been advised that it has proper grounds to pursue a damages claim.
“The board believes this should be vigorously pursued on behalf of all stakeholders.
Reports to date indicate that all 82 NZ stores will continue to trade while administrators will look to sell the business as a going concern.
Sales for Postie Plus for the six months to February 2, 2014 fell to $39.0 million from $43.3 million in the same period last year.
Gross profits fell to $22.2 million from $23.3 million in the same period last year.
Postie Plus Group Ltd (PPGL) is a New Zealand owned retail business with over 100 years of history. PPGL incorporates fashion brand Postie (apparel, beauty and accessories) and Schooltex (school uniforms).