Pacific Retail wants to boost its British PowerHouse store numbers to 200 in the next three years, and in time boost turnover beyond €400 million ($NZ1.07 billion) a year.
PRG chief executive Peter Halkett said five months after buying the British business for $NZ48 million that many of its stores were beating sales and profits targets.
Pacific Retail Group had expected to break even 12 months into the business, and that was still its target.
PowerHouse had turned a “significant corner” since Christmas when it did not meet sales volume targets in the critical festive period because of long supplier lead-times and inability to get stock flowing into the business in time.
That, plus worse-than-expected restructuring losses, will drag New Zealand parent PRG’s full-year result into the red after an $18.2 million profit last year.
But Mr Halkett said PRG “certainly” did not believe it had made a mistake by buying into PowerHouse. Five months into it, he would “absolutely” do it again.
“We have got our critics and sceptics out there but the only thing that will convince them is when we start to deliver the big profits.”
PowerHouse’s turnover was almost touching €275 million on an annual seasonally adjusted basis, representing about 2.5 per cent market share.
“We think we can do more than €274 million out of those existing stores ““ but ultimately we are going to reopen stores.”
The goal was to boost store numbers to 200 in three years, reach its original sales levels of €350 million to €400 million and then drive turnover beyond that. Capacity was “clearly” in the market to achieve that.
“We are actually looking at every store, store by store, how profitable they are and what their long-term prognosis is.”
Its stores in about four of the seven regions it does business in were consistently beating sales and profitability targets. About 60 of its 134 stores were regularly beating targets.
PowerHouse’s issues were clear ““ as were the solutions. “This doesn’t call for any particularly sophisticated or outrageously clever plan. This is just about getting the basics right. And that is why I am confident we can do this, the market exists, the brand is still very strong. .. and we know how to get the basics right because we’ve done it before and we’ll do it again.”
Despite being pleased with progress to date, PowerHouse was not out of the woods yet. “There is still more work to be done, but we are feeling very confident that we have a great business on our hands.”
From stuff.co.nz