Bargain hunters boost Peacock profits

This Is Money13 April 2012

DISCOUNT clothing retailer Peacock unveiled a 7.9% rise in profits today, claiming consumers were looking for more bargain items and shying away from expensive High Street's retailers.

The company, which operates the Peacock, bonmarche and Fragrance Shop brands, said sales were up 3.6% for the year to 31 March, claiming that consumer uncertainty was to its benefit.

Finance director Keith Bryant said: 'When people tighten their purse strings they look increasingly for value offers. Peacock is incredibly well set to take advantage of any downturn in the economy.'

Unveiling its annual results, Peacock said pre-tax profits rose 7.9% to £35m on the back of an 11.8% rise in turnover to £548.2m.

The company's performance is in stark contrast to many High Street rivals that have seen profits plunge as sales dry up. Marks & Spencer, Next and French Connection have all recently reported struggling performances.

The company plans to take advantage of its current strong position by opening 30 Peacocks stores, 20 bonmarche outlets and 30 new branches of the Fragrance Shop, which should create 800 jobs.

The group said its core Peacock chain saw same-store sales growth of 9.3% over the past year as moves to stock more fashionable products drew a positive response from shoppers.

At the same time, Cardiff-based Peacock pressed on with a store refit programme with 80% of the 430-outlet chain trading with the new design by the end of March and the remaining branches due to be converted over the next 12 months.

But the performance of the Peacock business was in contrast to its 350 bonmarche stores, which sells clothes for women aged 45 and above.

The retailer said it had misjudged the 'changing needs' of the mature womenswear shopper and this explained the 7.1% decline in like-for-like sales at bonmarche over the past year.

Action taken to improve the 'unacceptable trading' at bonmarche has included a shake-up of management, an overhaul of the supply chain and improved clothing ranges that focus on contemporary, classic and fashionable styles.

Despite its strong full-year performance, the company refused to comment on trading since April, but admitted conditions continue to be challenging.

Shares rose slightly in early trading, up 1¾p to 231p.

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