The first Pep&Co store will open on Wednesday July 1 in the Newlands Shopping Centre in Kettering, the first of a planned 50 openings in 50 days.
The new value chain is led by former Asda boss Andy Bond and former Sainsbury’s Tu boss Adrian Mountford and targets a “mum on a budget” with its range of womenswear, kidswear and home decoration.
Prices will start at £1 and rise to a top price of £25, with 95% of products priced under £10.
The 4,000 sq ft Kettering store is said to be representative of a typical store in the chain. It will employ between eight and 12 sales assistants and carry 7,000 SKUs.
The second store will open in Cwmbran on July 13, and the remaining 48 are to follow within a six-week period.
Bond explained that Pep&Co will respond to the discount and convenience trends he said are two of the three biggest trends happening in retail at the moment (the third being online).
“Where the idea for Pep&Co came from is that if you look at the resurgence of secondary high streets with brands like B&M Bargains, Aldi, Poundland, Poundworld and Home Bargains, the common theme is that they are all focusing on a family discount-seeking shopper and none of the brands that have emerged over the last few years are selling clothing,” he said.
“We genuinely believe there is a huge gap in the market for a mum shopping for herself and her family on the high street to deliver a price-led family clothing business.
“We are going to be extremely price competitive and we are also going to be broadly family fashion. We’re not going to be slaves to high fashion, we are going to have broad appeal product for kids and for mums and also some homewares.”
The team believes Pep&Co is the fastest “scale from scratch” opening ever attempted in the UK and the 50 stores in 50 days strategy has presented lots of challenges.
“Our initial plan was to launch at the end of July but we have actually pulled it forward a month to July 1 so we had to place orders before Chinese New Year. We had to do all of our development processes, sourcing, sampling and costings in a really tight time frame to get our orders down by the middle of January,” said Mountford.
“We had to find a supply base to make literally thousands of lines and make 8 million garments a year for us, which is our estimate in the first year. We did that mainly through personal contacts from the management team. We also have [access to] Pepkor sourcing offices in Shanghai and Bangladesh and it is just opening one in India, so we plugged into their sourcing and took advantage of their scale.
“We had to have 50 stores because we needed the scale. We thought that if the minimums were 1,200 or 1,500 of a colour how many stores do we need to have to sell that kind of level, turning the stock every eight weeks? That is why it had to be 50.”
He explained the store opening programme needed to happen within a six-week period as the same range had to be bought for every store that opens to achieve the required volumes.
The management team visited 350 towns to choose the 50 locations and had a master list of more than 700 where they believed the proposition could work, based on population, demographics, competition and proximity to residential areas.
“It’s quite a sophisticated model so we took the top 350 and visited all of those towns and had a big fallout rate because it was either too big, too small, the wrong end of town or the rent was too much,” Mountford said.
Store locations currently confirmed are Ashton-under-Lyne, Birkenhead, Birmingham Yardley, Bolton, Boscombe, Bristol, Burton upon Trent, Chatham, Chelmsley Wood, Corby, Cwmbran, Dartford, Derby, Dunfermline, East Kilbride, Eastleigh, Ellesmere Port, Falkirk, Glenrothes, Gloucester, Grays, Hemel Hempstead, Hull, Irvine, Kettering, Kirkcaldy, Maidstone, Middlesbrough, Newbury, Newport, Newton Mearns, Oldham, Paisley, Redditch, Redhill, Runcorn, Salford, Scunthorpe, Stretford, Sunderland, Warminster, Warrington and West Bromwich.
Pep&Co is the first investment by Pepkor UK, which is headed up by Bond and former Bain & Company consultant Mark Elliot. It is part of South African investment company Pepkor, owned by South African billionaire Christo Wiese.