Monro set to expand Poundstretcher

The former Matalan chief executive Angus Monro marked his return to the retail sector yesterday when he joined Brown & Jackson, operator of the Poundstretcher discount chain.

Mr Monro, 52, joins initially as a non-executive but will become chief executive of the company on 1 September.

The group plans to sell its other chains, such as What Everyone Wants and Your More Store, and concentrate on Poundstretcher, which will become the new name of the company. The group may then be used as a vehicle for retail acquisitions.

Brown & Jackson shares jumped 30 per cent to 45p on the news. Mr Monro has also taken a 10 per cent stake in the group.

Mr Monro was ousted from Matalan in May last year after saying he did not want to remain in the post beyond three years. He subsequently joined Oystertec, a pipe-fitting business, though he later fell out with its founder, Paul Davidson. At one point Mr Davidson described Mr Monro as "an idiot".

Yesterday, Mr Monro said he was looking forward to returning to the retail scene after a year away.

"It will be great fun," he said. "We want to take Poundstretcher from 335 stores to 500 and we're going to do something fairly exciting in terms of range development."

This is likely to include a bigger range of clothing that would compete with Poundstretcher's main rivals, such as Peacocks and Primark.

Mr Monro is acquiring half his shares through a new issue of 8.4 million shares at 34p each. The other half has been acquired in an off-market transaction from Tradehold, the South African group which controls Brown & Jackson.

Tradehold is loaning Mr Monro the money to buy the stock and repayment will depend on whether certain performance targets are met.

Tradehold's stake in the group will be cut from 68 per cent to 55 per cent as the group is panning to sell or grant £2.5m worth of shares to managers Mr Monro plans to bring in.

Brown & Jackson said in late May it expected to make a loss in the year to June, owing to price markdowns, adding that like-for-like sales would be flat compared with the year before.

It has 755 stores in total including the Your More Store, What Everyone Wants and The Brunswick Warehouse chains which are now to be sold. Total sales last year were £430m.

Mr Monro is known as a shrewd operator who helped build up Matalan from a little known northern company into a stock market star before a profit warning in January last year. Prior to joining Matalan in 1996 he was previously at Kingfisher and Marks & Spencer. As a result of his new appointment he will step back to be part-time chairman of Oystertec.

Mr Monro's new position will mean there are now several retail executives stalking the high street for acquisitions. Mr Monro will join the likes of Philip Green, the owner of the Bhs chain who was recently linked with a deal with Woolworths, and Terry Green, the former Bhs chief executive who left the department store group last week.