Reject Shop in sales turnaround

The Reject Shop is reaping the rewards of rejigging its retail offering and shaking up its marketing strategy.

Reject Shop CEO Ross Sudano

The Reject Shop has unveiled a sharp turnaround in its sales performance after rejigging its retail offering and shaking up its marketing strategy.

The Reject Shop (TRS) today revealed a net profit of $17.1 million for the 53 weeks ending July 3, an increase of 20 per cent compared to the 52 weeks through June 28.

Excluding the 53rd trading week and the costs associated with the exit of its Tullamarine distribution centre, profit was up 47.5 per cent year-on-year.

Sales revenue was up 5.7 per cent to $800 million, but on a comparable stores basis, sales were up a more modest 3 per cent, after slowing down in the second half of the year. The company said it was a pleasing improvement on the negative 0.8 per cent growth comparable sales performance for the previous year.

The Reject Shop will pay a final dividend of 19c, bringing the year’s total payout to 44c per share.

During the period the Reject Shop opened 14 new stores, closed six and ended the year with 341 stores operating Australia-wide.

Managing director Ross Sudano said the year was focused on understanding its customers and “creating a distinctive offer in the market place” and continually reducing costs.

“In response to feedback from our customers we have increased the number of core products available every day,” he said. “We are also investing in improving the experience in stores for our customers through changes to our merchandising standards, store execution and in store navigation.”

The company is in the process of building an automated distribution centre in Melbourne’s western suburbs, with an expected opening in early 2017. “Our new distribution centre will help us to further improve efficiency, productivity and flexibility within our supply chain,” Mr Sudano said.