Pepco Group ready to position itself for further expansion
By Sandile Mchunu 43m ago
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DURBAN – Steinhoff International’s subsidiary, the Pepco Group, yesterday said that it was planning to forge ahead with opening new stores despite the Covid-19 disruptions in its operations.
The fast-growing pan-European variety discount retailer and owner of the Pepco and Dealz brands in Europe and Poundland in the UK, said that it aimed to launch up to 70 new stores in the full financial year under the Poundland brand.
The group expanded its Pepco store portfolio by more than 15 percent year-on-year by opening 87 net new stores in the quarter to end December.
Pepco Group chief executive Andy Bond said that the expansion would be escalated as the group’s projections showed that consumer confidence would likely rebound in the future.
Bond said that Pepco believed that its growth strategy, centred on significant future store expansion within a structurally advantaged discount retail segment, and strong financial base, showed that the group could be more optimistic about future growth opportunity compared to a year ago.
“Accordingly, we remain confident about our prospects for continued growth across Europe in the balance of the financial year and beyond,” Bond said.
The group reported a 5.5 percent increase in like-for-like sales for the quarter, despite the impact of Covid-19 related lockdown restrictions on consumer behaviour impacting many key operating territories.
Pepco achieved sales growth of 6.6 percent, while Poundland and Dealz reported a 4.3 percent increase in sales during the quarter.
The group said Poundland’s revenue benefited from the continued strong performance of the Pep&Co clothing brand, which is present in 342 stores, and the continued extension of product ranges to price points above and below the £1 anchor price point.
“This included the successful launch of a widened Homewares proposition, under the Pepco&Co brand. Multiprice participation increased to 23.2 percent of revenue,” the group said.
The Pepco Group has 3 218 stores in 16 countries, which include the UK, the Republic of Ireland, Spain and across the central and eastern Europe region.
Group revenue rose 9.1 percent on constant currency basis to £1.19 billion (R24.73bn).
The group had a closing cash of €548 million (R10.10bn) at the end of the quarter, up from €392m compared to last year and its net debt declined to €187m, down from €332m compared to last year.
Bond said the disciplined adherence to clear growth strategy and a focus on day-to-day retail execution allowed Pepco to successfully navigate a turbulent trading environment.
“Our revenue performance clearly signals the strength of each of our retail brands and customer offers and our resilience to short term Covid-19 disruption,” he said.