Original Factory Shop and TJ Hughes cash in on festive trading down

TJ Hughes notched up an 8.9 per cent like-for-like sales rise in the five weeks to January 3. Profits were ahead and margins in line with last year.

TJ Hughes chief executive Sue Tennant said that the discount department store had a “great run-up to Christmas” and sales growth has been up double digits in January

Original Factory Shop delivered its best Christmas to date as consumers took advantage of its value offer. Like-for-like sales increased 3.7 per cent, while gross sales rocketed 22 per cent in the 13 weeks to January 4.

Gross margins improved by 100 basis points and the retailer said it is “firmly on target” to open 20 stores by the end of this financial year.
Chief executive Angela Spindler – who last week joined the company from Debenhams, where she was managing director – said she wants to raise the profile of the company, which she described as “very relevant to today’s climate”.

She said: “We had such a good start to January, which further underpins how this low-price operation is just what people are looking for.”
Tennant agreed: “In the current climate discounters can do well, but the product has got to be right.” She attributed 2 to 3 per cent of TJ Hughes’ sales growth to the trend for trading down.

Both retailers want to expand their brands as property comes onto the market and leases are more easily negotiable.

Spindler confirmed that Original Factory Shop, which has 102 stores nationwide, is interested in buying some Woolworths stores and Tennant would like to add five stores to her 49-strong portfolio this year.

Meanwhile, Poundland revealed this week that like-for-like sales climbed 3.9 per cent in the five weeks to January 4. Total sales soared 24.3 per cent.