Steinhoff banks on cheaper clothing sales as pandemic hurts

To drive sales at its discount chains as the retailer continues to fight for survival.
Image: Bloomberg

Steinhoff International Holdings NV is banking on cash-strapped consumers looking for cheaper clothes to drive sales at its discount chains as the retailer continues to fight for survival.

Revenue in the nine months through June fell 6% to 6.76 billion euros ($8 billion), with the last quarter reflecting the peak of the pandemic worldwide, the company said in a statement Friday.

As lockdowns continue to ease, sales at its European Pepco and Poundland outlets and African PEP and Ackermans stores are expected to benefit as “customers need these essential products every day, and the value focus gives the business some inherent resilience and a defensive positioning in times of economic turbulence,” the company said.

Revenue increased 2% in the period at Pepco, a European discount chain, and 7% at Mattress Firm, the US bedding division.

Steinhoff, which nearly collapsed in the wake of a 2017 accounting scandal, is working to persuade claimants to accept a settlement plan. It is due to hold a virtual annual general meeting on Friday afternoon.

Steinhoff urged all claimants support its proposal, while noting “there is no certainty yet that we will be able to conclude this proposed litigation settlement.”

The stock rose as much as 4.2% in Frankfurt.

© 2020 Bloomberg

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