Poundstretcher has announced a £3.7m loss for the year ending 31 March 2013, according to accounts posted on Companies House.
Like-for-like sales were down 2.1% for the period, while turnover rose 5.7% to £368m.
In 2012, the budget retail chain, which is owned by discount wholesaler Crowncrest, reported pre-tax profits of £1.6m.
Poundstretcher blamed the decline on “exceptional costs” of £4.5m and an “increasingly competitive market”.
“The discount trading environment in which the company operates is an increasingly competitive and challenging one,” said Poundstretcher secretary Martin Collinson.
During the financial year, Poundstretcher opened 18 new stores, closed 15, and carried out an extensive refit programme on 86 of its 400 stores.
“The management remain fully confident, despite progress to turn around the business [being] slower than expected, that the current strategy is the correct one and we will deliver sustained growth in turnover and ultimately profitability,” added Collinson.
Poundstretcher recently revealed to The Grocer that it hoped to open 50 stores next year - reaching 600 stores by 2018 - but would close half of its high street stores in the process.
“We currently have 150 Poundstretcher stores on the high street and we will aim to discontinue 50% of those at the end of their current leases, with at least 15 closing down next year,” said Hemant Patel, FD at Crown Crest.
“The likes of Home Bargains and B&M Retail are doing better than us because we are an older retailer and have been left with a lot of high-street stores that need updating.”
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