Value retailer Store Twenty One cut its losses by £15m last year but fell short of making its first profit in a decade.
The chain, which also trades as QS and is owned by Indian manufacturing and retail giant Grabal Alok, reduced pre-tax losses to £6.3m for the year to March 27, compared with £21m the previous year.
Store Twenty One chief executive Anupam Jhunjhunwala had forecasted that the chain would be in the black by the end of March if sales performed at the top end of expectations. However, its performance faltered in the final quarter due to deeper discounting.
Grabal Alok took over the business in 2007 and has implemented a series of cost-saving initiatives, which started to pay off in 2009. It improved its full-year margin from a 6.9% decline to a 5.7% increase, thanks to its strategy of opening stores in secondary towns where it could negotiate cheaper rents, and by sourcing 50% of its stock direct from Southeast Asia and the Far East. It sources the remaining 50% from UK importers.
The business still has 120 QS stores but is continuing to rebrand them to Store Twenty One. There are 90 branches trading under the Store Twenty One name in the UK. By the end of this year, it will tip the balance in favour of Store Twenty One shops through a combination of more refits and 30 new openings.
Jhunjhunwala said the chain had made a “very positive” start to the financial year. He added that it would “definitely” move into profit by March 2011, but refused to comment any further.
Store Twenty One launched a transactional website two months ago selling 1,000 products. Jhunjhunwala said he wanted the site to take more than £2m a week in two years’ time.