Poundland bucks high street woes to end year on a strong note

The owner of Poundland has cheered “strong” sales growth as the rollout of Pep&Co fashion outlets helped the budget chain shrug off wider high street woes.

Parent firm Pepkor Europe – owned by crisis-hit South African group Steinhoff – said the performance from its 840 Poundland stores across the UK and Ireland helped contribute to a 12.9% jump in overall group-wide sales to 781 million euros (£705 million) in its fourth quarter.

This saw revenues rise 10.6% to 3 billion euros (£2.7 billion) for the year to September 30.

Andy Bond, chief executive of Pepkor Europe, hailed a recent return to like-for-like sales growth at Poundland after a hit earlier in the year from the timing of Easter.

He also gave assurances that Poundland and its other brands, such as PEPCO and Dealz across Europe, were “financially strong” as the retailer continues to distance itself from the troubles at Steinhoff.

Steinhoff was plunged into crisis last year after disclosures of irregularities linked to its 2016 accounts, becoming one of South Africa’s biggest corporate scandals.

Mr Bond said: “We ended the financial year very strongly, as our key brands focused uncompromisingly on the delivery of their respective business plans.

“Poundland’s return to like-for-like growth is encouraging and the continued growth of PEPCO clearly evidences the broad appeal of their value for money proposition in existing and new markets.”

Steinhoff said last week that it would have to put back the release of its restated results for 2017 and 2018 due to delays to the investigation by auditors PricewaterhouseCoopers (PwC).

Pep&Co launch
Pepkor Europe chief executive Andy Bond (Darren Jack/PA)

The probe is being carried out after multibillion-euro holes were unearthed which saw 90% of Steinhoff’s stock market value wiped out and triggered a fire sale of assets, leading to speculation that Poundland could also be sold.

But Mr Bond has sought to give reassurance over Pepkor, saying in August the group was “undistracted by events at our parent company”.

In its latest trading update, Pepkor said Poundland’s sales growth was driven largely by the launch of Pep&Co discount clothing concessions “shop-in-shops” in more than 300 stores.

But total group-wide sales growth was partially offset by the closure of 60 stores in the previous financial year.

Pepkor has 2,360 stores in total, up 12.6% over the year.

Poundland last week launched a new Secret Santa aisle as a trial in its Stratford store in east London, offering £1 products that are already wrapped, including novelty gifts such as inflatable crowns and back scratchers.