Delays in summer stock reaching stores due to Red Sea shipping disruption contributed to sales at Poundland owner Pepco slumping over its latest quarter.
The retail group, which also runs the Pepco and Dealz brands across Europe, has reported that its like-for-like sales dropped by 4.3 per cent over the quarter to June 30.
The sales slump was even greater across its Poundland stores, which reported a 6.9 per cent drop in like-for-like sales.
The company said this was largely due to challenges linked to the launch of new clothing and general merchandise ranges from its Pepco business, which are “being addressed”.
Nevertheless, overall group revenues were up eight per cent year-on-year to €1.48bn (£1.25bn) as it was buoyed by a raft of new store openings.
Pepco is among retailers that have been hampered by volatility in the region, with many shipping firms having to redirect cargo around the foot of Africa following attacks by Houthi rebels.
It said this contributed to a delay in “summer stock hitting store shelves” in the quarter.
Andy Bond, executive chair of Pepco Group, said: “We have continued to execute against our strategy to deliver more measured growth – doing less, to achieve more – with a greater focus on improving profitability.
“Group like-for-like revenues in Q3 were below our expectations, partly due to macro factors, such as ongoing supply chain disruption, and company-specific issues, including slower-selling older stock which is being removed through markdown, as well as the transition to Pepco-sourced clothing and general merchandise in Poundland and Dealz.
“We are actively improving the availability and breadth of our ranges, and expect to benefit from these actions in the new financial year.”
The group reiterated plans to open 400 stores overall in 2024 while its guidance remained steady at €900m, up 20 per cent year on year.
The company appointed Vision Express boss Stephan Borchert as chief executive in April. He is due to start in July.