Poundland owner Pepco vows to turn around discount retailer as sales fall
The owner of Poundland has vowed to get the discount retailer back on track after its performance dragged on the wider Pepco Group.
In the first quarter of its financial year, the final three months of 2024, Poundland’s sales totalled €563m (£474.5m), down 9.3 per cent year on year on a constant currency basis.
That compares to Dealz’s sales rising by 16.2 per cent to €106m and Pepco itself reporting a revenue of €1.26bn, up 8.4 per cent.
Overall, the Pepco Group’s sales for the quarter totalled €1.93bn, a rise of 3.1 per cent.
In the period, the group opened 95 stores and closed 32, 13 of which were Poundland shops.
In a statement, the owner of Poundland said it remains “confident that Pepco will deliver profitable growth during the year, driven by further operational improvements and enhancement of the core customer proposition, supported by a continuing strong gross margin position”.
‘Getting Poundland back on track is a key priority’
Pepco Group CEO Stephan Borchert said: “The group delivered a mixed performance in its first quarter, with a strong performance from both the Pepco and Dealz brands, partially offset by Poundland’s ongoing challenges.
“It was pleasing to see Pepco – the key engine for the group’s future strategic and financial growth – deliver its first quarter of like-for-like sales growth in more than a year.
“This reflects how we have enhanced our core offer, sharpened pricing, and increased availability, alongside continued improvements in gross margin.
“Dealz also grew LFL sales by an encouraging 6.6 per cent, as the investments we have made drove demand for its food and general merchandise ranges.
“However, Poundland saw LFLsfall, largely driven by continued underperformance in clothing and general merchandise following the transition to Pepco-sourced product, and a decline in gross margin.
“Getting Poundland back on track is a key priority – we are undertaking a comprehensive assessment of the business and taking immediate measures on improving our cash performance and strengthening the customer proposition.
“The opening of our 5,000th store is a landmark moment for Pepco Group, highlighting the potential we have to further leverage our estate by enhancing our product offer with a compelling price proposition to delight customers and drive a stronger performance.
“In addition, we will further focus on driving higher capital returns through targeted store expansion to deliver future success across our core European markets.”