
Poundland saw sales nosedive in the quarter to December 31, driven by continued weak clothing and general merchandise performance as well as challenging market conditions.
Like-for-like sales at the value retailer slumped 7.3% for its first quarter ended 31 December. This performance meant that group like-for-like sales across its parent company Pepco declined 1.1% overall, despite positive like-for-like performances from stablemates Pepco and Dealz, which were up 1.4% and 6.6% respectively.
Group revenue rose 3% on a constant currency basis to €1.9bn (£1.6bn) during the financial period, bolstered by a 140 basis point uplift in group gross margin. Pepco Group attributed this to “continued strong progress at Pepco offsetting significantly lower margins in Poundland.”
The brand said it expected its toughest comparative quarter for Poundland was now behind them, and that it anticipated the negative sales performance for the retailer to moderate as it moved through the year.
A Pepco spokesperson said the group is “committed to getting Poundland back on track” through measures such as “increasing the number of core items at £1 or below from 1,500 to almost 2,400 in all UK stores.”
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It also confirmed the discount retailer would not open any net new stores over the year.
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.”
He also noted: “Poundland saw LFLs fall, 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.”
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