Type Retail Area served UK Website www.pepandco.com Headquarters Watford Parent organization Pepkor | Industry Fashion Products Clothing Number of locations 82 (March 2017) Founded 2015 | |
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Key people Adrian Mountford, Managing Director Profiles | ||
Pep&Co is a British discount fashion retail chain, owned by the South African company Pepkor and based in Watford, United Kingdom.
Contents
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.
Pep&Co opened their first "store-in-a-store" in March 2017, when they utilised space in an existing Glasgow Poundland store without affecting or impacting on the range offered by the parent store.
Foundation
Pep&Co is a value clothing chain, owned and operated by their parent company Pepkor. The concept was thought up by former ASDA chief executive Andy Bond and former head of Sainsbury's clothing business Andy Mountford, whilst in a chain of Starbucks. Bond believed there was retail capacity for a value clothing retailer following the demise of Woolworths and British Home Stores to name a few.
Following the opening of their first store on 1 July 2015, the retailer followed on with a further 49 stores within the next 49 stores, expanding at a rate not experienced since Next in 1982 and never achieved from a standing start. The entire opening programme came at a cost of £20m, with stores mostly being opened in secondary towns.
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. Many of the retailer's newly opened stores have in in smaller towns, where lower rent costs help ensure their pricing model is sustainable; this has been feasible due largely to larger supermarket chains opening smaller store formats in town centres, drawing customers to those areas and creating a greater footfall. Stores are typically designed to be minimalist in aesthetics, with their Kings Heath store have a minimal roof and bare floor, which the retailer claims allows them to cut costs which can then be passed on to the consumer.
The impact of a weakened exchange rate throughout 2016-2017 had an affect 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 subsequentially higher supplier orders, it is still not enough to fully absorb the higher import costs.
The retailer's pricing structure sees 95% of all stock priced no higher than £10, with many less.
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. 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 mens clothing items such as jeans, shorts and casual shirts, with a pricing strategy broadly in line with their existing female clothing ranges.
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.
Customers
The target market the retailer aims for are primarily females in the 30-45 age bracket, as opposed to the typical younger aged fashion market. Customers are on average slightly older than those that shop at Primark, who are better known for their offering in younger fashion lines.
Media
The retailer featured in an ITV documentary Bargain Shop Wars in 2016, which received positive reactions from customers and helped increase football significantly into stores, with 35 requests a second being made online to the retailer's store locator during the initial transmissions of the programme.