Poundland blames loom bands for 43% profit drop

The retailer has taken a huge hit in its half-year results

Poundland has seen sales slide 2.8%, with pre-tax profit down 43.1% to £53m.

Announcing its half-year results, the budget retailer said the drop in popularity of loom bands was partly to blame for falling sales, as well as an early Easter last year.

Shares fell 20% on the announcement.

Jim McCarthy, chief executive of Poundland, told the BBC: “We flagged that the results for this half this year would be less than last year because last year was an exceptional period where we benefited from… a late Easter that had quite an impact on sales, we had unusually fewer competitor openings, we had soft comparables and we had the one-off loom band craze.”

“We are, in fact, where we expected to be at this stage.”

Poundland recently bought competitor 99p Stores for £55m after it was clearned by the Competition and Markets Authority.

“The 99p Stores acquisition is a transformational deal for us, adding the equivalent of five years of UK organic growth and 40% to our store numbers in one go,” McCarthy said in a statement.

“The early sales uplifts from the first converted stores are very encouraging and we now plan to accelerate the conversion programmes so that the vast majority of 99p Stores will be converted by the end of April 2016.”

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