Delays in summer stock deliveries due to Red Sea shipping disruptions have led to a significant drop in sales for Poundland owner Pepco during the latest quarter.
The retail group, which also operates the Pepco and Dealz brands across Europe, reported a 4.3% decline in like-for-like sales for the quarter ending June 30.
Poundland stores were hit even harder, with a 6.9% drop in like-for-like sales.
Pepco attributed the slump to challenges related to the launch of new clothing and general merchandise ranges from its Pepco business, which are being addressed.
Despite these setbacks, overall group revenues rose by 8% year-on-year to €1.48 billion (£1.25 billion), driven by a series of new store openings.
The company has been impacted by regional volatility, with many shipping firms redirecting cargo around the southern tip of Africa due to attacks by Houthi rebels, causing delays in summer stock reaching store shelves.
Andy Bond, executive chair of Pepco Group, stated: “We have continued to execute against our strategy to deliver more measured growth – doing less, to achieve more – with a greater focus on improving profitability. Group like-for-like revenues in Q3 were below our expectations, partly due to macro factors, such as ongoing supply chain disruption, and company-specific issues, including slower-selling older stock which is being removed through markdown, as well as the transition to Pepco-sourced clothing and general merchandise in Poundland and Dealz. We are actively improving the availability and breadth of our ranges, and expect to benefit from these actions in the new financial year.”
The group plans to open 400 new stores in 2024, with guidance remaining steady at €900 million, a 20% increase year-on-year.
The company appointed Vision Express boss Stephan Borchert as chief executive in April, with his tenure starting in July.
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Delays in summer stock deliveries due to Red Sea shipping disruptions have led to a significant drop in sales for Poundland owner Pepco during the latest quarter.
The retail group, which also operates the Pepco and Dealz brands across Europe, reported a 4.3% decline in like-for-like sales for the quarter ending June 30.
Poundland stores were hit even harder, with a 6.9% drop in like-for-like sales.
Pepco attributed the slump to challenges related to the launch of new clothing and general merchandise ranges from its Pepco business, which are being addressed.
Despite these setbacks, overall group revenues rose by 8% year-on-year to €1.48 billion (£1.25 billion), driven by a series of new store openings.
The company has been impacted by regional volatility, with many shipping firms redirecting cargo around the southern tip of Africa due to attacks by Houthi rebels, causing delays in summer stock reaching store shelves.
Andy Bond, executive chair of Pepco Group, stated: “We have continued to execute against our strategy to deliver more measured growth – doing less, to achieve more – with a greater focus on improving profitability. Group like-for-like revenues in Q3 were below our expectations, partly due to macro factors, such as ongoing supply chain disruption, and company-specific issues, including slower-selling older stock which is being removed through markdown, as well as the transition to Pepco-sourced clothing and general merchandise in Poundland and Dealz. We are actively improving the availability and breadth of our ranges, and expect to benefit from these actions in the new financial year.”
The group plans to open 400 new stores in 2024, with guidance remaining steady at €900 million, a 20% increase year-on-year.
The company appointed Vision Express boss Stephan Borchert as chief executive in April, with his tenure starting in July.