Poundland chief executive Jim McCarthy has claimed the value retailer is well-placed to weather any storm if the economy deteriorates sharply after posting strong Christmas sales.
He said: “My contention would be that our shops are more insulated than most. I don’t think it’s all upside, but if there is a flight to value then we’re well-placed.”
In the five weeks to January 6, Poundland delivered an 8.6 per cent increase in total sales, on a 2.4 per cent uplift in like-for-likes. During the festive season, the retailer sold 30 million greetings cards, 8 million metres of gift wrap and more than 3 million Christmas crackers.
McCarthy said: “Compared with some of the other retailers, these are pretty good results. Our margins are robust and ahead of last year. We’re on target to achieve our budget.”
He also denied that Poundland’s owner, private equity firm Advent International, which has owned the company since 2002, might be considering an imminent sale of the chain. “We have a business plan. We’re absolutely focused on selling and making a profit.” McCarthy, who was previously managing director of Sainsbury’s convenience business, joined Poundland in 2006.
Retail Knowledge Bank senior partner Robert Clark said: “It’s a thoroughly professional outfit and the fundamentals look good. It should do well.”
He added that it was probable that this year the retail sector would be split between the top and value ends and that the likely outcome was that there would be greater mid-market discounting. “This means that Poundland won’t have it all its own way, but it still looks strong,” he said.
Founded in 1990, Poundland’s 167 stores carry an average of more than 3,000 lines. A programme of store openings is in place that will increase its portfolio by 30 by early 2009, with the same number planned for 2010.
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