More than one new Reject Shop a fortnight - that’s the discount retailer’s plan for the coming financial year as it increases its presence across Australia.
The chain opened 41 new stores in the last financial year, and plans to have another 43 up and running by the end of fiscal 2014.
It is all part of an ambitious expansion strategy to open more than 80 new stores in less than two years. In the long-term, it wants to have 400 stores nationally and be the ‘‘largest discount variety operator in all states of Australia’’.
But the rollout has weighed on the retailer’s 2012-13 results, with net profit down 11 per cent on the previous year, at $19.5 million.
This was despite a rise in continuing operations sales revenue to $618 million.
‘‘The store rollout impacts our short term profitability as we incur necessary expansion costs,’’ managing director Chris Bryce said. ‘‘(But) we believe (it) will lay the foundation for a far more robust and profitable business in the future.’’
In its annual report, the company says the expansion plan will help it reach three million new customers.
It will also mean recruiting 1000 extra staff across the business. With retail conditions likely to stay subdued in 2014, it hopes the ambitious strategy will help the company capitalise on any eventual rebound in consumer sentiment.
Queensland’s 2011 floods also incurred insured losses, and put its Ipswich Distribution Centre out of action for nine months.
Shareholders will receive a final dividend of 13 cents, up from 9.5 cents in the previous period.
In early afternoon trade, Reject Shop shares were trading 18 cents higher at $17.60.