Poundland owner Pepkor Europe has said that it is trebling the number of Dealz discount stores it operates in Spain and Poland over a 12-month period, with the group expected to operate 60 stores across both markets by year-end.
In its half-year statement, Pepkor Europe said that the Dealz business in Spain and Poland 'continues to develop positively', in line with the group's strategy.
Wider Offering
A full apparel offering has been added to six of the group's stores in Spain, where it is adopting a three-category offer, focusing on FMCG, general merchandise and apparel.
In Poland, where the business has been affected by the Sunday trading regulations, Pepkor's Dealz operation has been boosted by the introduction of local brands.
In its statement, Pepkor said that it completed the closure of its French operations during the second quarter of the year, which will enable it to focus on growing in Spain and Poland.
In the UK, its Poundland business continues to rationalise its store portfolio, Pepkor said, exiting weaker catchment areas and opening stores in stronger locations.
In the half-year period, Poundland opened 20 new stores, while relocating five stores to larger sites.
Poundland 'continues to outperform the wider UK high street', Pepkor said, with the roll out of clothing 'shop in shops' continuing to boost the brand.
PEPCO Growth
Away from single-price stores, the group's PEPCO business expanded its store portfolio by 19.3% in the half-year period, opening 99 stores, including its first two stores in Plovdiv, Bulgaria's second city.
Bulgaria is the group's 11th territory, and it said that it was 'on track' to open ten stores there by the end of the year.
At the half year Pepkor Europe traded from 2,473 stores, an increase of 11.9% year on year.
Group Performance
For the half-year period, Pepkor Europe posted seeing revenue growth of 13.3%, to €1.73 billion. It said that the first and second quarters saw a 'broadly even' performance,
EBITDA was up 29.1% to €151 million, the group said.
The group has announced former Dunelm and Halfords boss Nick Wharton as its new chief financial officer.
Commenting on its performance, Andy Bond, CEO of Pepkor Europe, said, “These results are further evidence that Pepkor Europe is developing into a strong, geographically well-balanced pan-European variety discount retailer.
"The foundation of the Group’s continuing strong performance remains our ability to provide exceptional value to our millions of customers every week within a core discount segment which is being accessed by an increasing number of consumers across Europe," he added.
Bond noted that earnings may slow in the second half of the year as the group increases its investment.
"With a focused strategy in place a strong financial base and three trading brands all performing well, the opportunity for long-term growth across Europe is clear," he said.
'Strong Results'
Analyst Greg Lawless of Shore Capital added, "In our view, these are strong results highlighting the strength of the discount format across Europe as the group’s fascia’s continue to win market share. Poundland’s UK performance is strong against a tough UK retail market with Q2 revenue growth of 3.1% and H1 growth of +1.6%.
"Pepkor Europe is a well-managed company with a clear customer proposition and a well-executed strategy. We will continue to watch and monitor the progress as the group continues to increase its geographic footprint across Europe."
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
