Poundstretcher is to drastically reduce its presence on the high street and focus on retail parks, The Grocer can reveal.
The discounter said it hoped to open 50 stores next year and to expand its estate from 400 to 600 stores by 2018 - but that it planned to close half its high street stores.
“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 discount wholesaler Crown Crest, which owns Poundstretcher.
“While we will keep a presence on the high street, our primary focus is now retail parks and there’s no reason why we couldn’t keep to a pace of 50 new store openings annually over the next five years.”
Profits at Crown Crest had fallen 16.2% to £14.2m in the year to 31 March and this had forced the company to review its Poundstretcher portfolio, said Patel, who admitted the retailer was struggling to compete. “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,” he said.
As well as focusing on out of town, it planned to beef up its grocery offer, added Poundstretcher CEO Aziz Tayub. “After Christmas, we will double our range of food and toiletries in at least 200 stores as fmcg is where our competitors currently have an edge.”
He claimed that like-for-like sales were up 3% for the first eight months of 2013.
The retailer recently debuted its new Pet Hut format in several new Poundstretcher stores and Patel said it planned to open a standalone Pet Hut store next year. All future Poundstretcher stores would be 20,000 sq ft with between 3,000 sq ft and 4,000 sq ft allocated to its Pet Hut offer.
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