Value retailer Store Twenty One reduced losses by £15m last year but fell short of making its first profit in a decade.
The chain, which is owned by Indian manufacturing and retail giant Grabal Alok and also trades as QS Stores, reduced its pre-tax losses to £6.3m for the year to March 27, compared with losses of £21m in the previous year.
Store Twenty One chief executive Anupam Jhunjhunwala had previously forecast that the chain would get back into the black by the end of March if sales continued to perform at the top end of expectations. However, its performance faltered in the final quarter, due to deeper discounting.
Grabal Alok took over the business in 2007 and has since implemented a series of cost-saving changes, which started to pay off in 2009. It improved its full-year margin from -6.9% to +5.73%, owing to its strategy of opening new stores in secondary towns, where it is able to negotiate cheaper rents, and by sourcing half of its stock direct from southeast Asia and the Far East.
It sources the other half, which tends to be more fashion-focused products, from UK importers.
Grabal Alok currently has 120 QS Stores but is rebranding them as Store Twenty One, which now has 90 branches across the country. By the end of this year, it aims to have more Store Twenty One shops through a combination of refits and 30 new openings.
Jhunjhunwala said the chain had made a “very positive” start to the new financial year and would “definitely” be in profit by March 2011, but refused to comment further.
Store Twenty One launched a transactional website with 1,000 products two months ago and it is adding new stock. Jhunjhunwala said he wanted the site to take more than £2m a week in two years’ time.