Value retailer Poundstretcher is pursuing an ambitious expansion strategy as it aims for a total of 900 UK stores and prepares to debut overseas in the Middle East.
The international expansion will make Poundstretcher the first value retailer to expand outside the UK and Ireland, signifying the sector’s potential for growth overseas.
Poundstretcher is opening its first international store, at the Madina Mall in Dubai, under the Poundstretcher banner. The shop, which will open in a fortnight at a cost of £250,000, will be the first of a tranche of stores in the Middle East. It is eyeing six additional locations, including four in the United Arab Emirates.
General manager for the Middle East and Africa Cliff Lomberg said: “There is a gap in the market for discount retailers out there. We think we can make money.”
It is understood that Poundstretcher is considering other international locations but Lomberg declined to comment on specifics.
The value retailer is also looking at more than doubling its UK store count over the next five to six years from 402 at present, and has plans for 100 new stores by March 2013.
The retailer made its first profit in six years in the year to April 2, posting a profit of £1.4m against the previous year’s loss of £7.1m.
Trading director Mike Morrison said Poundstretcher finished its most recent financial year with like-for-likes up 5%.
Morrison said: “We have a strong value proposition and we need to take it to market. The customer is responding to the low price and good value we offer.”
The stores will focus on homewares, FMCG and seasonal lines.
Poundstretcher recently completed its new £35m Warehouse, giving it enough capacity to deliver to 900 stores. “It’s up to us to press the button now,” Morrison added.
Poundstretcher acquired 18 stores from discount retailer Ugo this year in a pre-pack administration deal, as well as 10 former Focus DIY stores.
The retailer is also eyeing 20 to 30 former Peacocks stores and additional former Focus stores.