Reject Shop goes back to basics after ‘extremely disappointing’ second half
Link copied to
Reject Shop directors described falling sales as “extremely disappointing” in their annual address to shareholders — but said a renewed focus on everyday items such as “bulk coat hangers” was showing improved results.
The discount retailer’s first quarter results saw comparable sales down by 2.1 per cent, a figure the company (ASX: TRS) put down to a lack of wage growth and disposable income. Though monthly results were improving.
Investors pushed up the shares by 16c to $4.55 yesterday — though they were still only half the value of their 12-month high of $9.67.
The company admitted it had over-invested in promotional products at the expense of every day items and were returning to items value-conscious customers were looking for.
“We implemented changes to our product mix, increasing the availability of key everyday items and branded products such as laundry powder, tissues, dishwashing tablets and bulk coat hangers,” managing director Ross Sudano told investors at the AGM.
“At the same time we reduced the frequency of and investment in promotional variety that was clogging up our stores, tying up inventory.”
Though according to the latest product offering on Reject Shop’s website, there are still a myriad of unicorn shaped homewares and reversible sequin cushions.
The company reported a net profit of $12.3 million last year, down 27.8 per cent.
There are more than 400 Reject Shops across Australia that collectively employ some 6000 staff.
Despite the uncertain climate, the company opened 13 new stores and relocated four — but had to close the door on seven – part of a plan to ensure each was contributing to the business.