Poundland reported like-for-like sales up 5% in the Christmas quarter, whilst decline in total sales reflects net store closures. In Europe, the first Dealz stores open in Poland.
Healthy like-for-like performance from Poundland
In the three months ending 31st December 2017, sales in Steinhoff's European general merchandise division saw double digit growth of 10% year on year, reaching EUR 867. Poundland and Dealz stores in the UK, Ireland, Spain and France account for 59% of this, with Pepco stores in Eastern Europe accounting for the remaining 41%.
Poundland's sales performance reflects a 10% reduction in the number of stores trading. Sales decreased 5% (or 3% in constant currency) to EUR 513m. However, a healthy increase in like-for-like sales of 5% was supported by a record Christmas period.
The small chain of Dealz stores in Spain performed particularly strongly, growing like-for-like sales by 10%.
In the year ahead, Poundland will continue to pursue its multi-price strategy, and the roll-out out shop-in-shop Pep&Co clothing.
New market entry for Dealz
Building on the success of its Pepco business in Eastern Europe, the retailer has recently launched the variety discount Dealz banner in Poland. The first store opened in Poznan in February, with plans to reach 20 stores by the end of this year, and 200 stores in the next three years.
Retail Analysis subscribers will be able to download IGD's Dealz Poland store visit soon...
Management and finance solutions as challenging times continue for Steinhoff
Investigations into the accounting irregularities at parent company Steinhoff continue.
Following a series of senior level resignations in December, Steinhoff has appointed a new acting CEO Danie van der Merwe, deputy CEO Alexandre Nodale, chief financial officer Louis du Preez, and commercial director Philip Dieperink. Richard Heis has also joined in the new role of chief restructuring officer. There are further changes at board level, and new governance and ethics committee has been established.
Steinhoff has held meetings with lenders and credit insurers across its markets to address the challenge of accessing working capital. It reports that the majority of the group's international operating subsidiaries have now arranged their own working capital facilities. However, there is still work to do here, and Steinhoff is entering the next phase of broader lender engagement.