Pepco group sales rise but like-for-likes stutter as it unveils new CEO

Reporting for the second financial quarter ending March 31, 2024, Pepco said group revenues were up in the quarter by 11.7% to €1.3bn (£1.11bn) and 11.1% across the half to €3.2bn (£2.74bn).

However, as the group came up against “a tough comparative period” on H1 2023, like-for-like sales across its brands were down.

Like-for-like revenue growth was down 2.8% at Pepco, 2.8% at Poundland and 4.6% at Dealz for the quarter – down 2.9% overall across the group.

Pepco had 289 net new store openings during the first half of the financial year, with 203 opened in the first quarter and a further 86 stores opened in the second.

The retailer expects to open at least 400 net new stores by the end of the 2024 financial year.

Pepco also reported that on February 27, 2024, it was the target of a “sophisticated fraudulent phishing attack in its Hungarian business”, resulting in the loss of €15.5m (£13.3m).

Pepco said Hungarian police are continuing to investigate the incident and it is undertaking a review of training and procedures across the group.

New group chief executive

Pepco also announced the appointment of chief executive Stephan Borchert, who will take up his new role on July 1, 2024.

From that date, Borchert will begin a three-month induction period to “acquaint himself with the group’s operations and culture”.

During that time, Andy Bond will remain in his role as executive chair and will revert to non-executive chair on October 1, 2024.

Pepco said Borchert is “an accomplished CEO with a strong record of leading international companies across various sectors including fashion, beauty, pharmacy and healthcare services”.

From 2018 to 2022, he was chief executive of optical retailer GrandVision, which runs Vision Express in the UK and Europe, with more than 7,400 stores across 40 countries globally.

Prior to that, Borchert was president of Sephora for Europe and the Middle East on the global executive committee. He currently holds non-executive roles at “two major pan-European retail companies in the beauty and apparel sectors”.

Bond said: “On behalf of the board, it is great to welcome Stephan, who brings a wealth of experience and a results-driven track record in retail and international business operations.

“I look forward to working with Stephan to deliver our renewed strategy to improve profitability and cash generation in our core established business, while delivering more measured profitable growth.”

Borchert said: “I’m honoured to be the next chief executive of Pepco Group – which has the opportunity to become Europe’s leading variety discount retailer. Pepco Group is a powerhouse retail business with a strong reputation for delivering incredible range, value and convenience for customers.

“I am delighted to work alongside the leadership team to deliver on the group’s strategic priorities as Pepco Group enters the next phase of its growth journey.”