The revenue of Steinhoff’s European discount retailer, Pepco Group, jumped more than one quarter at the start of its 2023 financial year, as it entered a new market — Greece.
Group revenue rose 27% year on year on a constant currency basis in the first quarter to end-December, as it delivered record trading days.
Despite high inflation globally, partly because of the war in Ukraine, Pepco said inflation in clothing and footwear remained below headline rates, while it also benefited from new customers in Poland as refugees fled Ukraine.
“While the market environment continues to be challenging, we remain confident in the strength of our customer proposition and our price leadership position, as well as our ability to deliver against our strategic growth priorities,” Pepco Group CEO Trevor Masters said.
Steinhoff owns 79% of the company, which has its biggest footprint in Poland, and has been expanding into richer Western Europe and in Spain. It also opened its first stores in Austria in 2021.
Pepco Group, which owns the Pepco and Dealz brands in mainland Europe and Poundland in the UK, generates about half of Steinhoff’s revenue from continuing operations.
It opened 105 new stores — 100 Pepco and five Poundland — during the reporting period as it aims to open 550 new stores in 2023 — 34 more than it did in 2022.
The new stores included eight in Greece.
“We have seen a strong performance in Western Europe, particularly in Italy and in Spain. We had a strong opening in Greece this quarter and we are looking forward to launching in Portugal in [northern hemisphere] spring 2023,” Masters said.
The company expects core earnings (ebitda) to grow in the mid-teens during the financial year.
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