By Aimee Chanthadavong
Despite downgrading its profit guidance, The Reject Shop is looking forward to opening up to 13 new stores around the country.
“For the next calendar year, for the first half we will have eight or nine stores locked away while we will have four for the second,” Chris Bryce, The Reject Shop managing director, said.
“We’re so far pleased with the performances of our current stores. The only disappointment was the store located in Top Ryde, which the centre itself hasn’t worked, and even our Townsville store which has just opened was one of our strongest opening stores in three years.”
This announcement follows the company’s revision to its full year guidance following disappointing retail conditions since the November 2 interest rate rise announced by the Reserve Bank of
Australia.
The company expects first half profit will be significantly down on the corresponding half last year. As a result, the company has revised down its full year NPAT expectations for FY2011 from the earlier $26 million to $26.5 million; to between $21 million and $22 million.
According to Bryce, since the last interest rates rate rise comparable store sales for November, and December to date, has been negative, resulting in overall sales being significantly below expectations
“We haven’t seen something drop so quickly before. But reports and indication through the grapevine is that it has been pretty tough elsewhere,” he said.
Bryce also noted that sales in seasonal ranges such as Christmas, seasonal food and gifts have been impacted. Similarly, unseasonably cool weather has hampered sales in summer related merchandise.
Nevertheless, he said the company continues to seek new sites in accordance to the company’s planned strategy.
“The strength of our underlying business is still there. It’s just this seasonal period that is just tough for us. But we do plan to see our business to growth.”