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Sainsbury's seeks expansion cash

Sainsbury’s is to accelerate its growth plans with a stock market placing to raise £445m, after another strong quarter of growth, says chief executive Justin King.

GENERAL MERCHANDISE

Sainsbury's seeks expansion cash

Sainsbury’s is to accelerate its growth plans with a stock market placing to raise £445m, after another strong quarter of growth, says chief executive Justin King.

“We have announced our intention to raise approximately 445 million via a placing of new ordinary shares and an issue of convertible bonds. These funds will provide us with the financial flexibility to significantly grow our busin

ess further and faster, as we are now planning to grow space by 15 per cent, equivalent to circa 2.5 million sq ft, by March 2011,” says King. “Growing space to extend our store network and to provide an even better food offer and additional space for non-food ranges is a core part of our 'Recovery to Growth' strategy. Our continuing success from our new store openings and store extensions has underpinned our confidence in our ability to develop new space. In the current environment there are an increasing number of opportunities within the property market.

The company's trading statement for the 12 weeks to 13 June shows total sales rose by 7.6 per cent excluding fuel, or 3.2 per cent with fuel. Like-for-like sales were up 7 per cent excluding fuel (2.5 per cent with). The company saw another increase in shopper numbers to process more than 18.5m transactions per week.

“Product availability and customer service metrics reached new record levels and customers continue to recognise the competitiveness of our offer. At the beginning of June we made a further significant investment in price and have now lowered 7,000 prices since January 2009. Consumers are spending more cautiously but continue to look to trusted brands to act responsibly on ethical and environmental concerns on their behalf... As a reflection of universal customer appeal, sales of our 'basics' range continues to grow strongly at over 50 per cent year-on-year and our RSPCA Freedom Food ranges have quadrupled compared to quarter one last year,” says King.

Sainsbury's TU clothing range has recorded its best ever quarter, achieving a million sales in one week.

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