Postie Plus makes loss on Arbuckles sale to Cameron

Tuesday 29th July 2008

Postie Plus Group, the retailer whose stock has tumbled 45% in the past year, said shareholders approved the sale of its ailing Arbuckles chain to Kathmandu founder Jan Cameron.

The sale of 13 stores and stock for about $4 million will result in a loss of $2.4 million to $2.6 million, reflecting write-downs on goodwill and stock, Postie Plus chairman Peter van Rij told shareholders at their meeting in Christchurch today.

Fierce competition in bedding and home-ware retailing meant Postie Plus was unable to turn around the unprofitable stores, leading to the sale. The company will retain a further 13 stores for use with its Postie+, Baby City and Schooltex brands. The lease on three outlets wasn't renewed.

Van Rij last month said slowing sales in the third quarter, and slimmer margins meant the company was unlikely to make "any significant improvement on the first half loss of $2.9 million."

Consumer confidence dropped to a 17-year low last month, according to the Westpac McDermott Miller Consumer Confidence Index.

With the sale of Arbuckles, Postie Plus's total stock will reduce to about NZ$24 million from NZ$28 million and provide a positive profit contribution of more than NZ$1 million to normal trading.

Postie Plus shares were unchanged at 40 cents.

By Jonathan Underhill

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