Poundland gets its Pep from change in retailer’s strategy

Poundland is benefitting from a change in strategy by value fashion retailer Pep&Co, as it shares space – and costs – with its retail sibling.

The West Midlands based retailer was bought by Steinhoff last year in a £610m deal.

Pep&Co launched in the UK in July 2015 and embarked on a 50 shops in 50 days strategy. It is part of South African retail group Pepkor which became part of Steinhoff in 2015.

Former Asda boss Andy Bond led the Pep&Co launch and he became Poundland’s executive chairman last November, when then-chief executive Kevin O’Byrne decided to join Sainsbury’s.

His focus was to integrate Pep&Co and discount store GHM! – standing for Guess How Much! – into Poundland’s operation.

Pep&Co began to open concessions within Poundland stores and has now closed around 20 of its own shops, where there was duplication.

Chief executive Adrian Mountford, in an interview with trade publication Retail Week, said: “Where there’s been an opportunity to close the stores and move it into an adjacent Poundland, we’ve done that.

“Poundland doesn’t pay any more rent to put a Pep&Co in and we save the rent in our stores, so from a group perspective it makes no sense to have two stores in the same town where you have a Poundland store that’s big enough to take both.

“We have reduced the standalone estate purely because we make more money trading in a combined location, where possible.”

Poundland, which is headquartered in Willenhall, last year generated sales of £1.31bn from its 900 locations.

Steinhoff employs 90,000 people in its 6,500 retail outlets worldwide. Its other UK brands include Harveys Furniture and Bensons for Beds.