Postie Plus seals sale of Babycity to private equity firm

New Zealander clothing retailer Postie Plus Group’s stakeholders strongly backed the sale of Babycity stores to a private equity-funded company led by former L V Martin chief executive Trevor Douthett, after the group posted third quarter

sales are down 5 percent on top of the 4.6 percent decline in its first-half sales.
 
“We are continuing the transformation of Postie as a modern, exciting retailer with an attractively priced range of apparel, health and beauty products for all the family. We are ready to expand our offering and the sale allows us to reconcile our retail operations,” chairman of the group, Richard Punter, said.
 
The announcement was made at the company's special meeting at which shareholders “overwhelmingly” approved the just over $4 million sale of its Babycity chain of stores, as reported by local media. The company didn't provide details of the voting outcome.
 
Douthett will take over 11 of the 18 stores, either by assignment of the lease or by sub-leasing. When Postie Plus bought the chain in 2003, there were 24 stores. In the meantime, Postie Plus will continue to supply apparel to the Babycity chain under a wholesale agreement and has signed a five-year restraint-of-trade agreement in infant hardware retailing. “This is a significant milestone and, with our shareholders' approval, we can now get on with realising Postie Plus' potential,” chairman Richard Punter said.
 
When the Babycity deal was announced, chief executive Ron Boskell acknowledged that, at $100 million a year in sales, the 81-store Postie Plus chain is “a little bit light” for a listed company.
 
Postie Plus shares are unchanged at 24 cents, valuing the company at $9.6 million compared with its $40 million value at the 2003 float. The shares have fallen from their year-high at 32 cents in January, reported ‘BusinessDesk’.