Discount retail stores thrive in tough times. Poundlands seems to be a good example. The firm is planning to create 2000 jobs and open 50 new stores to augment its 250 existing ones, many being installed in former Woolworths premises.
Discount retailer Poundland posted annual operating profits [August 17th 2010] up 81% to £21.5m, on turnover up 28.7% to £509.8m. Jim McCarthy, chief executive, called the results “impressive” and promised further profits growth and expansion. He said: “With the economic uncertainty continuing, we are seeing many more first time shoppers joining our… customer base and with this trend set to continue, I remain confident of our prospects for the current financial year.” Poundland employs more than 7,500 staff, and created about 2,000 full- and part-time jobs during the financial year ending in March 2010.
The firm, based at Willenhall, West Midlands, opened 56 outlets during the last financial year, many of which are based at former Woolworths stores. The chain, owned by the private equity company Warburg Pincus, is gradually increasing the average size of its stores, and also stocking more branded items and food.
An interesting point is the way in which a smaller more dynamic firm is able to react in potentially difficult times. Woolworths, which might have been able to follow a similar strategy failed to survive the credit crisis, and became an opportunity seized by Poundland.