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Poundland using Irish expansion as a test bed for Europe

Poundland is using its expansion into the Republic of Ireland as a test bed for the rest of Europe, the company's retail operations director has told Insider.

Tim McDonnell also said the discount retailer is aiming to eventually have 1,000 stores – it currently has 410 – in its UK portfolio as it continues to open 60 new sites a year.

His comments come after Willenhall-headquartered Poundland reported record results with turnover up 21.6 per cent to £780m in the year to 1 April 2012.

Poundland expanded in Europe during the period with nine new stores in the Republic of Ireland trading under the "Dealz" brand.

"Part of our expansion plan is to go into the Republic of Ireland and test the euro," McDonnell said.

"And Ireland is doing really well, with 13 stores open at the moment. And we have more identified to open in the next few months."

He added that the euro had taken "very well" to the retailer as the economic conditions are similar to that in the UK with customers looking to make savings.

"What we are doing is understanding how it works and testing the euro in Ireland and making sure we fully understand how the model works. And logically we would then look further into mainland Europe," he said.

"We are making sure Dealz as a brand works, and we are confident in it. Once we have opened in more towns in Ireland then we can look further afield."

Underlying EBITDA (earning before interest, tax, depreciation and amortisation) at the discount retailer was £40.1m – up 26.5 per cent in 2011/12.

The company said it served more than four-million customers a week in the period, compared with about 3.5 million in the previous year.

"The customers in this day and age are desperate to seek out value and make their money go as far as possible," McDonnell added.

"People don't want to get less, they just want to spend less, and I think what Poundland are doing is satisfying our customers by making their money go further.

"We were successful before the recession and growing very nicely anyway. We're growing despite the fact numbers are down on the high street, when it recovers we believe we will be even stronger."

Next month the group will open a new £7 million 200,000 sq ft distribution centre at Hoddesdon, Hertfordshire.

Source : Edward Devlin – Insider Media

06 July 2012
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