Pepco Steinhoff’s European cut-price retailer has seen a sharp increase in revenue following a record expansion of stores.
Pepco owns the discount brands PEPCO and Dealz in mainland Europe and Poundland in the UK. The company was listed on the Warsaw Stock Exchange last year, but Steinhoff retains a 79% stake.
In a trading update for the year to end September, the company said its revenue increased by more than 17% to €4.8 billion (on a constant currency basis). While Poundland only saw a 5% increase in sales, PEPCO revenue jumped almost 29%.
A record number of 516 net new stores were opened, bringing its total to 3 961 stores. While PEPCO traditionally focused on Poland and Eastern Europe, 163 new stores were opened in the “strategically important” Western European markets of Italy, Spain, Germany and Austria.
Pepco said demand for its products in mainland Europe remains strong despite economic uncertainty.
“The outlook across the UK remains challenging as constraints on consumers’ disposable income continue. That said, our value-led proposition becomes even more relevant in these challenging times and continues to drive new customers to our stores, expanding our target market, across Europe.”
The group plans to accelerate its store rollout in the coming year, with annual capex rising to between €350 million and €400 million.
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“Whilst trading conditions continue to be challenging, we are confident in our continued progress and believe that the market volatility offers a significant opportunity to grow our market share and brand presence across Europe,” Pepco said.
Meanwhile, Steinhoff confirmed that it hasn’t taken any decision about its US business Mattress Firm. Steinhoff owns 50% of the company, the largest specialty mattress retailer in the US.
More than a year ago, Steinhoff said that it was considering listing Mattress Firm. Earlier this year, Steinhoff said the company was “IPO-ready”.
But on Wednesday, the company said it continues to explore strategic options and that “no definitive decision has been taken with respect to any specific course of action”.
Steinhoff also confirmed that it is talking to lenders about restructuring its debt to extend repayment terms. The group has corporate debt totaling some €10 billion.
Steinhoff’s share price gained more than 2% in opening trading to reach 182c.
Source: News 24
