Pepco Group, the owner of popular retail brands such as Pepco, Dealz, and Poundland, has shown resilience amid the coronavirus crisis with a strong performance in the first half of the year. While many retailers were forced to close due to lockdown measures, Pepco Group’s stores were able to remain open as they sell both essential and non-essential goods.

In the six months leading up to March, the company reported a 9.7% increase in revenue, reaching €1.912 billion. However, in the five months leading up to February, before the lockdowns took effect, revenue had risen even higher at 14.4% to €1.705 billion. Like-for-like sales increased by 5% in the shorter period but only managed a 0.7% increase for the entire six months. This suggests that the stores that were open during the lockdowns primarily sold essential goods rather than their budget fashion line.

Although pre-tax profit experienced a 16.3% decline to €89 million, it had seen growth of nearly 22% in the five-month period. The expansion of the Pepco brand in central Europe and the opening of new Dealz stores in Poland and Spain contributed to the positive performance. The Pepco brand experienced strongly positive like-for-like sales with an increase of 8.1% during the shorter period, while Poundland and Dealz saw a more modest rise of 2.2%. However, the pandemic’s impact on the company’s overall performance resulted in lower profits due to reduced store trading and footfall in March.

Nonetheless, Pepco Group remains financially strong with a solid balance sheet. The company has reported that revenue is returning to pre-Covid levels, and 99% of its stores are currently open for business. However, like-for-like sales are currently negative. CEO Andy Bond expressed confidence in the company’s ability to turn sales into profit, as well as its commitment to investing in infrastructure and maintaining low prices. He acknowledged the uncertain consumer outlook but believes that the demand for discount retail will rise amid prolonged economic uncertainty, placing Pepco Group in a favorable position to capitalize on this trend.

Pepco Group aims to become Europe’s largest discount variety retailer, and its store opening program is propelling it towards this goal. The company ended the period with 2,844 sites, marking a 15% increase compared to the previous year. Additionally, Pepco Group is expanding and relocating some of its shops. It is also actively negotiating reduced rents, particularly in the UK where Poundland has been focused on cost reduction. Bond revealed that 76 Poundland store leases have been successfully renegotiated, with rent reductions exceeding the company’s 25% expectation.

Sources:
– [Pepco Group Website](https://pepcogroup.eu/)
– [Dealz Website](https://www.dealz.eu/)