Pepco, the pan-European discount retailer and Steinhoff subsidiary, said its store expansion programme continued in the third quarter and it was on track to deliver on an upgraded target of 450 new stores in the 2022 financial year.
Steinhoff International Holdings’s share price increased 4.8 percent to R2.60 on the JSE yesterday afternoon – it is still a far cry from the R5.55 it traded at on January 18, with the price having declined steadily since.
The owner of the Pepco and Dealz brands in Europe and Poundland in the UK, said in a third quarter trading update that new store openings, the biggest driver of value creation in the group, had continued across all brands in the quarter to June, 30 with 350 new stores added so far this year, excluding the closure of 59 Fultons stores.
Group revenues for the quarter of €1.21 billion (R20.8bn) brought the year-to-date revenues to €3.58bn, which represented year-to-date revenue growth of 17.4 percent on a constant currency basis.
Compared with the same quarter a year before, third quarter revenue was up 17.1 percent on a constant currency basis, led by Pepco delivering 28.5 percent growth with a particularly strong performance in Pepco Hungary, Czechia and Serbia.
On a like-for-like basis, third quarter revenue grew by 4.9 percent, with Pepco growing 7.3 percent on this basis and Poundland Group by 2 percent.
Pepco Group opened 115 new stores in the third quarter, excluding the closure of 16 Fultons stores. Pepco branded stores saw 109 net new store opening in the third quarter, including 40 in Austria, Italy, Spain and Germany.
Eighty-two store renewals were completed in the third quarter, making to 668 the store renewals for the year-to-date.
In March 2022, a trial in Spain offering the full range of Pepco clothing, Pepco GM and FMCG (fast-moving consumer goods) across selected stores did “exceptionally well”, and the initial response of customers was encouraging.
“We have decided this destination format is the best way forward for our customers in the Spanish market. We will convert our existing Dealz stores in Spain to Pepco stores and add the FMCG offering where space allows,” the group said.
Pepco Cchief executive Trevor Masters said, “The group has delivered another quarter of good progress and a resilient trading performance.”
He said they were excited about their expansion plans in Spain as these were the first step on the journey to make the best of the group’s offering available to more customers than before.
“It means we can leverage the benefits of our broader offering across the group, making us even more efficient and effective.”
He said while trading conditions were challenging, “in the absence of further significant deterioration in the macro-trading environment, we remain on track for another good year which will meet guidance.”
edward.west@inl.co,.za.
BUSINESS REPORT