Catch Group buys Pumpkin Patch as it signals a move to scoop up more “premium brands”

One of Australia’s pioneer e-commerce players has signalled its plans to add more “premium” brands to its portfolio, after snapping up the intellectual property and customer database of childrenswear retailer Pumpkin Patch.

Catch Group was established by Gabby and Hezi Leibovich in 2006 and operates daily deals sites CatchOfTheDay and Scoopon, as well as GroceryRun and Mumgo.

It will now add the Pumpkin Patch brand to its stable, after purchasing the company’s brand and IP assets from its receivers.

Pumpkin Patch collapsed into receivership in October 2016 with multimillion-dollar debts. Receivers KordaMentha began winding down the business in November and all of the brand’s retail stores in Australia and New Zealand were closed by the end of January.

The sale to Catch Group, the contracts for which were signed earlier this month, includes Pumpkin Patch’s customer database, local and international trademarks, and its product designs and innovations. The sale price has not been disclosed.

While Pumpkin Patch’s online store stopped trading prior to the bricks-and-mortar stores closing, the brand will soon be re-born as an online-only retailer. A relaunch, complete with a new line of Pumpkin Patch clothing, is expected to take place in the early part of the next financial year.

Speaking to SmartCompany, Catch Group chief executive Nati Harpaz says the Pumpkin Patch database of customers is “in the millions”, although there’s likely work to be done to determine how many of the email addresses belong to legitimate customers.

While Harpaz says Pumpkin Patch’s receivership was “not ideal”, he believes the brand’s customers understand why it occurred.

“There was never an issue with the brand, the issue was with the operation of the business,” he says.

“The environment of the business has changed.”

Harpaz says Catch Group has made a “conscious” decision not to rush into relaunching the brand, and will instead spend time getting the quality and range of products right.

“If we do a good job with the design and pricing, customers will run back,” he says.

Growing through acquisitions and taking the fight to Amazon

Childrenswear is a brand new arena for the Catch Group, but rather than seeing it as a change in direction for the online retailer, Harpaz describes it as the company simply “expanding” what it does.

The company was reported to be considering either an initial public offering or trade sale last year, however, the Leibovich brothers instead bought out the company’s investors, including James Packer, Seek co-founder Andrew Bassat, and Tiger Ventures.

There’ll likely be more acquisitions of “premium brands” on the way for the group, which turned over more than $300 million in 2016, with Harpaz nominating apparel, homewares, beauty and consumer electronics as sectors were there are opportunities for the group.

The key, he says, is to not only compete on price.

“I’ve always had the view as a retailer that you need to have a product that is unique to you, available only to you, or you end up competing on price or experience,” he says.

While Harpaz says competitive pricing is in the Catch Group’s “DNA”, owning brands like Pumpkin Patch will also give the group the ability to offer its own high quality and unique products.

This approach will hold the group in good stead when Amazon eventually arrives in Australia, says Harpaz.

“Amazon can’t get Pumpkin Patch,” he says.

Harpaz claims Catch Group will be able to offer better prices than Amazon on its “standard” products, and says “on top of that … [we’ll have] unique brands”.

And as for how the Catch Group plans to ensure its acqusitions, including Pumpkin Patch, are successful, Harpaz says it comes down to understanding what the brands “stand for”.

“You have to really understand what you’re buying,” he says.

“For us, venturing into this new area, being entrepreneurs we’re happy to take the risk and go for it,” he says.

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