Peacock plans 100 new stores

DISCOUNT stores group Peacock is to open 100 new outlets this year as it continues to boost its share of the growing value retail sector.

Reporting a 24% jump in first-half profits, to £14.3m, chief executive Richard Kirk said he is confident of another good year, reflected in a 20% rise in the half-time dividend to 3p.

Sales for the 26 weeks to 2 October were up 13%, to £261m, with a like-for-like rise of 3.4%. Strong performances from the Peacocks chain and recent acquisition The Fragrance Shop offset a disappointing result from bonmarche.

Sales at bonmarche fell just over 7% like-for-like, hit by poor summer weather and mistakes on some ranges, but moved back into positive territory in the final few weeks of the first half. Kirk is confident the business back on track.

At Peacocks, the like-for-like increase was 9%, with total sales up just over 15%.

'Given the poor trading in the clothing market in recent weeks, it would be surprising if Peacocks had managed to escape this completely,' Numis Securities said in a research note. 'On this basis we would not be surprised to see some profit taking in the short term. However this is a well managed business with a good growth story.'

Numis maintained a 300p target price on Peacock's shares.

Competition at the budget end of the clothing market is fierce, with supermarkets muscling in and grabbing market share. Walmart-owned Asda's George clothing is now one of the best-selling brands, particularly of childrenswear.

The trading environment is also toughening in the run-up to Christmas as five UK interest rate rises since last November take their toll on consumer spending.