Pumpkin Patch plans to close its 20 stores in the United States, as it battles challenging retail conditions, which it warns will hurt profits.
The children'swear retailer says trading conditions across all its markets remain volatile and there are no signs of a material improvement in the long term.
Like other retailers, Pumpkin Patch has been hit by the rising prices of raw materials, including cotton. And it says a warmer-than-usual start to winter in New Zealand has also affected sales.
It now expects to make between $12 - $14 million in the year to the end of July, less than the $16 - 1$8 million it forecast in January.
Meanwhile, the company says its US operations are unsustainable given the poor state of the retail market, and it expects to lose between $2.4 - $2.9 million there in the 2011 financial year.
So it's decided to shut its 20 stores in the United States over the next six months.
It's also focussing on ways to turnaround its underperforming stores in Britain and may reduce the number of people working at its head office in Auckland.
Shares in Pumpkin Patch fell 8 cents to $1.02 on Wednesday.
