EMBATTLED retailer Instore is to ditch the Instore name and convert all of its stores back to the original Poundstretcher name following an annual loss of nearly £6m.
The Huddersfield-based company said attempts by former management to move mid-market with the Instore concept had proved a mistake and the group will return to its value for money heritage.
The decision follows the arrival of new chief executive Aziz Tayub, whose cash and carry group Crown Crest now owns a controlling 57 per cent of Instore.
Under the plans some 150 Instore shops will revert to the Poundstretcher name giving the group a total of 309 Poundstretcher stores.
Mr Tayub said the decision to convert half the stores to Instore had created an estate split between two different fascias which had confused shoppers.
The smaller high street stores will be rebranded as Poundstretcher while the larger out of town stores will be rebranded Poundstretcher Extra.
"Although this process will take some time to complete, it clearly signals a move toward brand consistency and a re-energising of the Poundstretcher brand," said Mr Tayub.
Instore is not releasing a figure on how much it will spend converting the stores, but said costs would be relatively small as the conversion process is more to do with signage and visuals rather than layout.
Mr Tayub was speaking yesterday as the group announced a 5.8m loss before tax and exceptional items, more than double last year's 2.2m loss.
Describing the results as "extremely disappointing", Mr Tayub said the group is working hard to control costs, both in terms of product buying and central overheads.
This includes sourcing more from abroad, particularly China, and introducing branded food and toiletries which tend to attract people into the store.
Instore's company secretary Martin Collinson said the group's link with Crown Crest cash and carry gives it access to a range of well-known food brands including Heinz, Walkers and Cadbury's at very attractive prices.
Mr Collinson said the group is seeing some encouraging signs in current trading.
"The good weather has helped sales of our gardening range and outdoor living products such as barbecues, garden furniture and paddling pools," he said. "But trading conditions remain very challenging."
Following the 5.8m loss in the year to February 28, the group hopes to move back towards break even this year.
"We remain determined to succeed," said Mr Collinson. "We have ongoing financial support from Crown Crest who have provided us with a 5m short term loan and substantial trade credit facilities."
The group is experimenting with different store layouts and has converted 15 stores to a new-style layout which looks like a mini-supermarket with aisles as opposed to the current walk-around style associated with stores like Ikea.
The new layout has allowed the group to introduce more food and toiletries and so far Mr Collinson said the results have been encouraging. However any roll-out is likely to be limited until the group's performance picks up. Instore has acquired 5.2m worth of goods from the administrators of Woolworths and will be selling these over the coming months.
The group reported a 0.3 per cent drop in revenue to 295.8m while like-for-like sales for the 52 weeks fell by 0.8 per cent.
Concerns have been reported about the group's financial stability going forward, but the company said it has secured bank facilities for the period to June 30, 2010 as well as continued backing from Crown Crest.
The group's 20 remaining Ponden Mills stores, which are seen as non-core, are under review.