Profitable Maplins prepares to expand

Maplin Electronics, which is based in Rotherham, South Yorkshire, plans to open seven stores over the next six months. It has already opened five stores this year, including a shop in Harrogate.

A Maplin spokesman said the company planned to carry on growing, while keeping a tight grip on costs.

The company, which was founded in 1972, employs 2,120 people at 174 stores around the UK and Ireland.

A spokesman said yesterday: "Each store is slightly different in terms of jobs, but we estimate that we are creating at least 170 new positions this year."

Apart from Harrogate, stores have opened in Salisbury, Southend, Lowestoft and Crayford in Kent so far this year. The next store opening is in Kings Lynn in Norfolk next month, with others due to open in Kensington High Street, Loughborough, Dundee, Folkestone, Stratford-upon-Avon and Crewe before 2011.

During 2009, the group opened 12 stores and its full year operating profit increased from 32.3m to 36.2m. Group sales were flat at 203.7m.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) grew to 40.5m, from 36.5m the year before. Like-for-like in-store sales fell by five per cent, although Maplin said this was partly due to very strong growth comparatives with 2008. The company said overhead costs had continued to be tightly controlled, while gross margins had grown year-on-year by 1.1 per cent.

Dave Whittle, Maplin's managing director, said: "During these challenging economic times we have focused our efforts on protecting profits through careful management of our gross margin.

"We have made a conscious decision not to chase unprofitable business to deliver like-for-like sales growth at the expense of our operating profit."

Maplin sells more than 15,000 products, including MP3 players, satellite navigation systems for cars, digital cameras and wi-fi connectors.

The company said its customers ranged from "technology enthusiasts" to complete novices.

Despite signs of economic recovery, many European retailers are struggling because consumers are reluctant to spend.

Many analysts believe taxes and unemployment will rise as governments take action to reduce their debts.

As a result, shoppers are becoming more cautious and retailers are taking steps to protect their profits.

Earlier this week, Kesa, Europe's third largest electricals retailer, said it expected trading to remain tough as it beat annual profits forecasts.

Kesa, which runs Comet in the UK, revealed that it was making progress with plans to grow sales over the internet and expand its store network across Europe.

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