investment statement for - Pumpkin Patch investor relations

fashion created for kidsKey PersonnelPumpkin Patch's performance is dependent on the efforts andabilities of its executive management (see page 17). Whileeach of these executives is party to an employment contract,under the terms of the contracts each executive is permittedto terminate the contract upon notice. Pumpkin Patch'ssuccess is also dependent on its ability to hire additionalpersonnel as necessary to meet its business needs. Whilstevery effort is made to retain key employees, plan forsuccession and recruit new personnel as the need arises, theloss of one or more key personnel may adversely affectPumpkin Patch's business and earnings or growth prospects.Reputation or Brand DamagePumpkin Patch's reputation and brand are valuablecomponents of its business. Pumpkin Patch has in placeprocedures to set relevant terms of trade with suppliers andbuying agents to ensure that the quality of the product ismaintained and also to deal with other activities of supplierswhich could affect the quality of the product or the reputationor brand of Pumpkin Patch. Notwithstanding these efforts, it ispossible that customers’ perceptions of a reduction in qualityin Pumpkin Patch products or a perceived association byPumpkin Patch with socially irresponsible behaviour or supplypractices may damage Pumpkin Patch's reputation or brandand thereby adversely affect its earnings or growth prospects.LogisticsPumpkin Patch is reliant on third parties to deliver its stock to itsdistribution centre in New Zealand and stores in variousmarkets around the world. Industrial relations at sea ports andairports in New Zealand and overseas are traditionally volatile.There is a risk that delivery of its product to the distributioncentre and stores may be delayed by reason of industrialdispute or other factors affecting the transport arrangements.This may adversely affect Pumpkin Patch's ability to deliverstock to the stores which may adversely affect business andearnings.Head OfficePumpkin Patch’s head office and distribution centre arelocated on the one site in Auckland from which all the businessoperations are managed and from which all stock isdistributed. Pumpkin Patch has in place procedures to ensurethat disruption to business in the event of a disaster affectingthe site is minimal and in particular holds general insuranceover the site. However, a major disaster affecting the site mayadversely affect the ability of Pumpkin Patch’s personnel tomanage the business and may adversely affect PumpkinPatch’s earnings and financial position.Fashion TrendsThe long term success of Pumpkin Patch depends on its abilityto interpret trends in the children's clothing market. While thishas been successful in the past there is a risk that new designswill not be well received by these markets resulting in PumpkinPatch having to clear inventory at a discount which wouldaffect its earnings.CompetitionThe Company may encounter higher levels of competitionthan it currently experiences. Any increase in the competitiveenvironment may have an adverse effect on Pumpkin Patch'sbusiness, earnings and growth.Third Party Retailer ArrangementsPumpkin Patch’s future strategy involves selling a greaterproportion of its products through arrangements with agents43