It smacks of disloyalty, a lack of trust. Intervening, even seeking more information can be emotionally fraught. If you are given information and you are told things are being fixed, what do you do?" Punter recalls grimly how he stood up at the last annual meeting in 2012 and told shareholders things were improving. The outsourced distribution tender was conducted with care and as an independent director he relied on information provided by management. Punter says, hand on heart, he does not believe he could have averted the disaster. In Postie Plus' case, the departure of the incumbent chief executive (which Punter maintains was intended anyway), and his own experience left little option when sales "hit a brick wall". "This is the problem independent directors face: It is always hard to know when it is time to take the step," he said. It is not always easy as an independent director to know when it is time to stand up and intervene. It would not be right ethically," Punter said.
The lot of the independent director is that you don't get to throw your hands up and walk away. His intervention also illustrates a few things that need recognising about the importance of independent directors - and shows an independent directorship is far from being a sinecure. What has helped is Punter's decision as chairman to ask the board to let him be chief executive until the crisis abates, as he insists it is.Īlthough he denies it, Punter appears to be relishing the challenge of "rebuilding the castle wall little by little, brick by brick," as he puts it. "I said, ‘How does that help our shareholders?" and the answer was it doesn't." "I came under a lot of pressure to name and shame," Punter said. "I'm furious at myself."īut he says giving in to that anger does not help shareholders, and he has staunchly refused to name the distributor (although it has been outed as Kuehne & Nagel by Christchurch newspaper The Press). Everybody's angry," said Punter, a shareholder himself. "I'm angry they're angry our shareholders are angry. He will not name the distribution company, or outline the financial penalties it may have incurred as a result of the problems. Punter talks openly about the stuff-up with one exception. Efficient distribution is key there, too, as margins are fine and job lots small. The distribution failure also damaged Postie Plus's Schooltex school uniforms business, Punter says. Replenishing garment sizes that sold out became erratic, too, alienating more customers. The first few blistering weeks of the summer-retail season are when retailers are able to sell their wares without heavy discounting.īy the time Postie Plus got its stock onto the shelves, it had to begin discounting immediately, destroying its margins and devastating its share price leaving the company worth just $6.6 million as measured by market capitalisation, roughly $80,000 for each store it operates.Ĭustomers had to go elsewhere for many of the things they wanted, but it was not only bulk deliveries that were delayed. The effect in the low-margin apparel industry of that was profound.īy "missed" he means the stores did not get their summer lines in time for peak demand. But those clothes did not get where they were supposed to be when they were supposed to be there. The new distributor was charged with getting garments into Postie Plus's network of over 80 stores nationwide. The short explanation is Postie Plus, which is in the business of selling affordable, mainstream clothes, was moving its headquarters to Auckland, where much of its future growth will come.Ĭoincidentally, the distribution agreement was up for renewal and was put out to tender, with the contract and distribution centre, which had been damaged in the second Canterbury earthquake, moving to Auckland. What happened to Postie Plus has been agonising to watch, especially for the mum and dad shareholders of the small, relatively illiquid company, which is largely ignored by fund managers who see it as too small to be worth troubling with. The latter was 30 cents a share at the start of 2012, but last week stood around 16.5c despite the sharemarket going gangbusters over the same period. The move put Punter in a rare position on the NZX where Postie Plus is listed, making him chairman/chief executive tasked personally with repairing the damage to the company's business and share price.
That crisis - the failure of a new distribution system - saw sales plummet and Punter volunteer to assume the mantle of chief executive until normal service was restored.
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