Pep&Co
 | |
| Company type | Retail |
|---|---|
| Industry | Fashion |
| Founded | 2015; 9 years ago |
| Defunct | 2023 |
| Fate | Absorbed into Poundland and Pepco |
| Headquarters | , UK |
Number of locations | 82 (March 2017)[1] |
Area served | UK |
Key people | Adrian Mountford, Managing Director |
| Products | Clothing |
| Revenue | £29.1m (2016)[2] |
| £-14.7m (2016)[2] | |
| Owner | Pep&Co Group |
Number of employees | 492 (2016)[2] |
| Parent | Steinhoff International |
| Website | www |
Pep&Co was a British discount fashion retail chain, owned by the South African company Pepkor (a wholly owned subsidiary of Steinhoff International) and based in Watford, England.
Pep&Co opened their first store in the Newlands Shopping Centre in Kettering, Northamptonshire in July 2015. The retailer opened their first 50 stores in 50 days, an average of a store a day, with aspirations to expand up to 900 outlets.[3]
Pep&Co opened their first "store-in-a-store" in March 2017, when they utilised space in an existing Glasgow Poundland store without affecting the range offered by the parent store.[1] The chain announced in November 2017 that it planned to expand into the Republic of Ireland by opening a "significant number" within Dealz's stores.[4]
In February 2020, Poundland has begun piloting a broader variety of children's clothes across 50 of its shop-in-shops at Pep&Co.[5]
As of 2023, the Pep&Co brand is no longer used, and was going to be fully phased out in 2024, but ended up being December 2023. The Poundland and Pepco brands are now used for clothing.[6]
Foundation
Pep&Co is a value clothing chain, owned and operated by their parent company Pepkor.[3] The concept was thought up by former Asda chief executive Andy Bond and former head of Sainsbury's clothing business Adrian Mountford, whilst in an outlet of the Starbucks chain.[7] Bond believed there was retail capacity for a value clothing retailer following the demise of Woolworths and British Home Stores, to name a few.[8]
Following the opening of their first store on 1 July 2015,[9][10] the retailer followed with 49 further stores within the next 49 days,[1] expanding at a rate not experienced since Next in 1982.[9] The entire opening programme came at a cost of £20m, with stores mostly being opened in secondary towns.[7]
Business operations
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Retail strategy
The retailer expanded rapidly during 2016, particularly in locations where similar rival Primark had no presence, with Pep&Co's managing director Adrian Mountford suggesting that they are the only retailer which competes directly with Primark on price. Other outlets have been opened within existing Poundland stores, particularly larger stores where space has allowed, further aiding the rapid progression at a faster rate than opening individual stores would.[11] Many of the retailer's newly opened stores have been in smaller towns, where lower rent costs help ensure their pricing model is sustainable; this has been feasible largely due to bigger supermarket chains opening smaller store formats in town centres, drawing customers to those areas and creating a greater footfall.[7] Stores are typically designed to be minimalist in aesthetics, with their Kings Heath store having a minimal roof and bare floor, which the retailer claims allows them to cut costs which can then be passed on to the consumer.[8]
The impact of a weakened exchange rate throughout 2016-2017 had an effect on Pep&Co, with proposals to increase prices on loss-leading T-shirts with a sell price of £1, initially conceived a marketing tool to draw in customers. Whilst some of the impact of a weakening currency had been offset by higher sales and subsequently higher supplier orders, it is still not enough to fully absorb the higher import costs.[11]
The clothing retailer uses social media as a means to market and compete with its rivals, with one particular case in February 2018 involving Primark, whereby the retailers were embroiled in a light-hearted battle regarding the price of their jeans offering; Primark had reacted to a statement from Pep&Co that the latter's jeans price were lower, which made Primark publicly lower their own price in return.[12]
Products offered
Pep&Co's parent company Pepkor has existing supplier relations in place with their other subsidiary chains, offering the retailer shorter lead times and an existing global sourcing network.[7] Products on offer come with a 101-day guarantee (compared to the 100-day guarantee offered by ASDA), though many items sold are produced outside of the UK.[8] An interview with the managing director in September 2015 discussed the lack of a menswear department since their inception several months prior, although this was addressed in November 2015, introducing essential men's clothing items such as jeans, shorts and casual shirts, with a pricing strategy broadly in line with their existing female clothing ranges.[7]
Customers
The typical target market is primarily females in the 30-45 age bracket, as opposed to the typical younger-aged fashion market.[11] Customers are on average slightly older than those that shop at Primark, who are better known for their offerings in younger fashion lines.[7]
Corporate affairs
Financial performance
The retailer's first 15 months of trading resulted in a net loss of £14.7m, reportedly due to administrative expenses of £22.3m despite turnover reaching £29.1m.[13]
| Year ending | Turnover (£m) | Profit | |||
|---|---|---|---|---|---|
| Gross (£m) | Operating (£m) | Pre-tax (£m) | Net (£m) | ||
| 24 September 2016 (15-month period)[2][13] |
29.1 | 7.9 | -18.9 | −14.7 | |
Media
The retailer featured in an ITV documentary Bargain Shop Wars in 2016, which received positive reactions from customers and helped increase footfall significantly into stores, with 35 requests a second being made online to the retailer's store locator during the initial transmissions of the programme.[14]
References
- ^ a b c "Pep&Co, UK's fastest-growing discount fashion chain, to open in Poundland". Glasgow Evening Times. 7 March 2017. Retrieved 10 March 2017.
- ^ a b c d "Pep&Co sales reach £29m in first 15 months". Drapers Online. 12 April 2017. Retrieved 14 April 2017.
- ^ a b "Clothing retailer Pep&Co looks to open 10 Northern Ireland stores". BelfastTelegraph.co.uk. 28 October 2015. Retrieved 29 March 2016.
- ^ "Pep&Co to expand into Ireland". Drapers. 27 November 2017. Retrieved 21 December 2017.
- ^ "Poundland expands Pep&Co clothing range". Drapers. 6 February 2020. Retrieved 30 June 2020.
- ^ Wright, Georgia (2023-02-02). "Pep&Co to axe jobs at UK head office - Retail Gazette". www.retailgazette.co.uk. Retrieved 2023-11-07.
- ^ a b c d e f "Adrian Mountford on Pep&Co's '50 stores in 50 days'". Drapers. 4 September 2015. Retrieved 12 March 2017.
- ^ a b c "What YOU thought of our first look inside Pep&Co - and these are the bargain prices we found". Birmingham Mail. 24 February 2017. Retrieved 13 March 2013.
- ^ a b Sarah Butler (1 July 2015). "Pep&Co becomes latest high street discounter with first store in Kettering". The Guardian. Retrieved 29 March 2016.
- ^ Hounslea, Tara (25 June 2015). "Image gallery: First look at Pep&Co's debut store". Drapersonline.com. Retrieved 29 March 2016.
- ^ a b c "Discount retailer Pep&Co to raise prices to cover loss-making £1 t-shirts". The Telegraph. 17 January 2017. Retrieved 11 March 2017.
- ^ "Primark and Poundland are embroiled in an amusing Facebook war over a cheap pair of jeans". Daily Mirror. 14 February 2018. Retrieved 15 February 2018.
- ^ a b "Pep & Co suffers loss as investment hits bottom line". Retail Week. 13 April 2017. Retrieved 14 April 2017.
- ^ "Pep&Co reveals expansion plans". Fashion Network. 13 May 2016. Retrieved 11 March 2016.