Jonathan Chancellor | 20 February 2013

The Reject Shop intends opening a record number of new stores

The Reject Shop intends opening a record number of new stores during 2013.

The discount variety retailer today reported a 21.2% increase in net profit to $20.1 million in the December half after stronger sales.

The retailer has opened six stores since December 2012.

It plans a further 10 openings before Easter and then seven before July, lifting the number of new stores in the current financial year to a record 40.

Its opening rate, which is twice its historic growth rate, seeks to take advantage of troubles at Retail Adventures which has closed around 100 stores since its administration last October.

Reject Shop has picked up 14 Retail Adventures stores.

"The strong performance of our new stores opened during the period reflects the robustness of our business model and the continued appeal of The Reject Shop brand,' the company said today.

"During the half, we opened 17 new stores, as well as relocating two existing stores."

The store openings were widespread with: five each in Queensland and New South Wales; three in Victoria; and two each in Tasmania and Western Australia.

The company said the new stores had performed above expectations while the trial of a temporary second store in an existing major shopping centre has provided significant learnings for our future store growth strategy.

"We are extremely pleased at the trading in the majority of our existing stores, with only a small number of stores, primarily in larger centres, dragging down overall sales growth."

The company also advised it had achieved "positive outcomes" on renewal of leases and will continue to negotiate strongly on all future renewals.

"As previously indicated, we are prepared to exit stores where occupancy costs are unrealistic or the long term viability of the retail precinct is questionable. Some of our stores within larger shopping centres are high on our priority list for further discussion with our landlords," the managing director Chris Bryce said.

 

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