Peacocks has eyes on more stores as profits rise 38 per cent

The rising threat of the discounters to established high street names such as Marks & Spencer was further highlighted yesterday when Peacocks reported a sharp rise in profits alongside healthy sales growth.

The rising threat of the discounters to established high street names such as Marks & Spencer was further highlighted yesterday when Peacocks reported a sharp rise in profits alongside healthy sales growth.

Peacocks, which has 300 high street stores selling clothes at budget prices, saw profits rise 38 per cent to £4.6m in the six months to September. Underlying sales in the five weeks to 4 November are up 5 per cent on last year, ahead of the 3 per cent recorded in the first half. This compares with a fall of 17.4 per cent in underlying clothing sales reported by Marks & Spencer the previous day.

"There is a drift towards the value sector,' said Peacocks' chief executive, Richard Kirk. "People are looking increasingly for value and the value operators are offering a good shopping environment, good customer service and good prices." Peacocks is on track to open a further 35 to 40 stores in the current year. It has also started a six-month trial to sell its adult clothing and footwear ranges in branches of Woolworths. The first store to take the ranges opened in Watford in September and four more have been added since.

This trial is in addition to Peacocks' relationship with Kingfisher's Big W larger format stores under which Peacocks supplies Big W with its clothing ranges. Four more Big W's are set to open this autumn bringing the total to eight, Peacocks said. Peacocks is also moving into the mail order market via a joint venture with Express Gifts, part of the Findel group.

Peacocks floated on the stock market last December when the shares were priced at 163p. They hit a peak of 222p but have since been caught up in the negative sentiment in the sector. They fell 14.5p yesterday to 102p.