Trouble Ahead for Popular Discount Store as The Reject Shop Announces Store Closures


With rising financial pressures and loss of revenue, The Reject Shop has announced it will shut the doors on eight stores by the end of June.

Despite the initial hope of a turnaround, financial forecasts indicate that the retailer will run at a loss of up to $2 million in 2019. This has prompted the decision to close a number of stores.

There are currently more than 350 Reject Shop stores across the country. However, the discount retailer has announced that eight Reject Shop stores will close — four South Australian shops fronts and four stores in Victoria.

While details of which stores will close (other than the state in which they operate) have not yet been released, it’s been reported that the chief executive Ross Sudano will be leaving the company.

Lower consumer confidence, stagnant wages, changing spending patterns and the increase in energy costs are all being blamed for the closures. According to a statement by the company:

The reduced earnings guidance reflects a tough trading environment in the retail sector which has continued to be impacted by low consumer confidence, flat wages, increases in the cost of living and a rapidly falling housing sector,” the company said in a statement.

Gross margins have fallen as the expected benefits from sales and merchandise related initiatives have not landed with consumers during the half.”

Future plans dashed

Sadly, it was only back in 2015 that Reject Shop chairman, Bill Stevens, announced that sales growth was on the rise following the opening of 19 new stores.

The focus of the discount retailer over the last few years has been the re-ranging of stores and the provision of an improved customer-friendly presentation.

In Retail World Magazine, Mr. Sudano is quoted as saying: “Getting this value mix right for our customers is critical in extending their trust and increasing foot traffic in our stores to generate additional transactions and sales growth to give the necessary lift in sales.”

mum central

A look back at the history of The Reject Shop

The Reject Shop dates back more than 30 years in Australia. In fact, it opened its first store in 1981 in Melbourne selling factory seconds.

Within four years it had stopped selling factory seconds and instead became the discount variety store we all know and love.

By 2004 The Reject Shop opened its 100th store and successfully listed on the Australian Stock Exchange at $2 per share.

Three years later (2007) The Reject Shop entered the ASX Top 300 and just two years later opened 30 new stores (23 opened in 22 weeks!).

The Reject Shop opened its 200th store in 2010 and within another three years, it had 300 stores across Australia.

Now with more than 350 stores, it is certainly sad to see an iconic Aussie retailer suffering.


Avatar of Leanne Philpott

A former Sydneysider, she turned her ideas of a sea change into reality and now lives with her family in beautiful South-West WA. A lover of yoga and travel, like most mums, she’s on a quest to create a better work-life balance. When she’s not pulling socks out from behind the sofa or sponging little hand prints off the walls, she’s in the kitchen trying to dream up exciting lunch box ideas for her three cheeky monkeys.

Write A Comment

Share via
Copy link