Poundland half price childrenswear sale

Source: The Grocer

Poundland has been running half-price childrenswear sales in stores this year

Poundland’s first half performance was behind expectations due to challenges in implementing a new sourcing arrangement of clothing and general merchandise at group level.

The variety discounter’s like for like sales were down by 0.7% in the six months ended 31 March, according to a trading update from parent Pepco Group.

Poundland EBITDA was down 6.5%.

“Despite a positive fmcg contribution, Poundland’s performance was behind expectations due to challenges in implementing the significant range change to Pepco products, which we are addressing,” said Pepco Group executive chair Andy Bond.

Poundland switched to sourcing clothing through parent Pepco from September last year, in a move intended to improve quality and allow lower prices through economies of scale.

The change involved launching new childrenswear lines, with more space devoted to the range in stores. However, Poundland has been running half-price childrenswear sales in stores this year.

“While customer reaction to the new Pepco clothing ranges has driven higher net promoter scores and positive feedback – notably around value – there have been issues with the offer not fully replicating the previous depth of Poundland’s men’s and women’s ranges and coverage across sizes, which has led to lower like for like revenues in the clothing categories since its implementation,” said the trading update.

Pepco-sourced general merchandise was also introduced into Poundland stores from March 2024. Revenues in this category were impacted during the period as old lines were phased out to introduce the new Pepco-sourced stock, according to the trading update.

“We expect the disruption is now largely behind us, with an improving performance in the second half, but as with clothing, we only expect to see the full benefit of this transition in full year 2025 and beyond,” it said.

Poundland opened 81 stores during the period, including 46 Wilko conversions. It also closed 40 stores, with many linked to the opening of the new Wilko conversions nearby, as well as some lease expiries.

Performance of the Wilko conversions had been mixed, according to the update, due to a combination of the scale of the conversions required to trade the stores through the Christmas period and the transition to new Pepco-sourced clothing and general merchandise.

Across the group, half one revenue was up 13.8% to a record €3.2bn. Group EBITDA was up 28.2% to a record €487m, driven by Pepco EBITDA up 38.9%.

The Grocer revealed last month how recent closures by Poundland had included nine former Wilko stores. The closures came within months of Poundland taking control of the leases to the stores from administrators for Wilko and reopening them under its own fascia. Poundland said all affected staff had been offered roles in nearby stores.