Sales reached £880m in the year to March 31, a rise of 15% on the previous year and underlying earnings reached £45.4m, up from £39.3m – a rise of 15.6%. Quite the achievement as Poundland's high street peers struggle to stay open. Shop closures have slowed in 2013 but they are still high, at an average of 18 each day.
‘It has been a year of tremendous progress,’ said Jim McCarthy, chief executive of Poundland. ‘The discount sector is now a mainstream feature of the UK retail scene.’
Poundland is Europe’s biggest 'single price value retailer' (aka 'pound shop'), and as the name suggests, sells everything for £1 or less. Its thrifty offering has captured the imagination of the UK’s newly price-conscious shoppers – serving 4.5 million customers each week.
The retailer, owned by private equity firm Warburg Pincus, currently has 458 stores in the UK and plans to increase this to more than 1,000. It opened 69 new stores in Britain and Ireland last year and plans to open another 50 this year, having already opened 30.
The retailer isn’t concerned that the impending recovery could scupper its onward march, believing any upturn will only serve to further boost its sales.
‘There are some early but encouraging signs of improvement in the economy and in consumer confidence and Poundland is well placed to capitalise on any upturn,’ said McCarthy.
We guess once you’ve had a taste of your favourite brands at a fraction of the price you’d pay in your local supermarket, it’s pretty hard to go back. We’re all hooked on £1 tea bags and 50p biscuits.
Owner Warburg Pincus is pretty confident in the brand's continuing success too, and is interested in a slice of the newly invigorated IPO market. Apparently, having bought Poundland for £200m three years ago, the private equity firm is considering floating the bargain bazaar, with valuations expected to come in around £600m. A straight sale could also be on the cards.
With the high street battleground still claiming the lives of many brands, discount stores have been performing incredibly well. As we reported back in July, bargain stores such as Poundland and Home Bargains are snapping up out-of-town retail space, as other stores retreat or go into administration, negotiating with cash-strapped landlords to get superior deals. This onslaught shows no sign of stalling.
‘Over time I'm confident we will have over 1,000 Poundland stores in the UK,’ said McCarthy.
The future’s cheap, the future’s Poundland.