Brexit woes blamed for slump by Leicester-headquartered Crown Crest Group

The owner of national discount retail chain Poundstretcher has blamed the Brexit after falling into the red.

Leicester-headquartered Crown Crest Group announced a pre-tax loss of £3.5m for the year to 31 March 2017, down from a profit of £3.4m in the 12 months before.

The company also made a reduced turnover of £441.5m, compared to £449.3m in 2016. Turnover from Poundstretcher dropped from £429.7m to £397.7m.

A statement from the board says: “There are continuing pressures in the external wholesale market whilst sales of the group’s value retailer Poundstretcher also decreased during the year.

“The group faces a number of risks and uncertainties and it is the directors’ policy to mitigate these risks to the greatest extent possible.

“The group’s activities are affected by the underlying economic climate but the directors believe that this presents opportunities given the ‘value’ nature of the group’s offering.

“The directors are ensuring that the sourcing of products remains robust to take advantage of the market place.

“As regards product sourcing, the group acquires a significant proportion of goods for resale from outside the UK which are paid for in foreign currency.

“The group is subject to movements in foreign exchange rates, principally in US dollars.

“The group’s policy is to cover its commitments to foreign exchange rates by entering into foreign exchange contracts within a short period of time of export contracts being concluded.

“Following the Brexit decision in June 2016, the sterling weakened considerably against the US dollar which resulted in significant currency losses for the group during the year.”