Pepco issues profit warning and announces organisational shuffle
Pepco Group, the discount retailer behind brands like Pepco, Poundland, and Dealz, has cut its profit outlook for the second time in less than three weeks due to a “challenging” trading environment in Central and Eastern Europe and management distractions. Its shares dropped 15% on Thursday, leaving them down 43% this year.
Andy Bond, Executive Chairman, revealed that like-for-like sales in the main Pepco business saw “double-digit” declines in September. The company is grappling with weaker consumer demand, unsatisfactory gross margins, and unseasonably warm weather affecting autumn/winter collections.
To address the situation, Pepco Group has undergone a management shakeup, with Anand Patel stepping down as Managing Director of Pepco, replaced by Barry Williams, the MD of Poundland. Austin Cooke has been promoted to MD of Poundland.
A new Group Executive Committee has also been formed to conduct a strategy review focusing on cost management and immediate returns.
Bond commented, “We need to refocus on delivering for our customers in our core business while delivering more measured growth.”
Pepco Group anticipates an underlying EBITDA of approximately €750 million for FY23. Further details on their strategic plans will be shared on October 18 during their capital markets day.
“We remain confident in the opportunity of building Europe’s leading variety discount retailer offering great value to consumers across a range of FMCG, clothing, and general merchandise products.” – Andy Bond, Executive Chairman.
