Pepco gains new momentum after reorganization – a strategic winner in the Hungarian market

By: Trademagazin Date: 2025. 07. 30. 11:54

While the Pepco group is making a painful exit from Germany, it is gaining new momentum in the Central and Eastern European region, including Hungary. The discount giant is rebuilding itself with a change in business model, a strong brand-focused strategy and significant financial results, writes vg.hu.

Exit from the West, focus on the East

The bankruptcy protection application of Pepco’s German subsidiary and the series of store closures are not just rationalization: they signal a rethinking of the company’s entire business model. After the symbolic sale of the British Poundland chain for 1 pound, the company has finally said goodbye to FMCG-based operations and is focusing on two brands – Pepcó and Dealz – that bring higher margins and more stable cash flow.

Growing revenue, improving margins

In the third quarter of the 2025 financial year, Pepco Group achieved sales of EUR 1.1 billion, an increase of 7.7% compared to the same period of the previous year. Similar store sales increased by 2.6%, within which Dealz produced a 5.8% increase and Pepco 2.4%. Gross margin increased by 180 basis points, which is assessed as a result of the new portfolio and pricing efficiency. The company plans to open 250 new stores this year, mainly in the region – while the network already exceeds 4,200 stores.

The Hungarian market plays a key role

With 266 stores, the Hungarian subsidiary is a stable player in the domestic discount sector. In 2024, Pepco Hungary had a turnover of more than HUF 105 billion, and its after-tax profit was HUF 6.6 billion. The clothing and home furnishing offering remains attractive to price-sensitive consumers – especially as the company gradually withdraws from lower-return markets in Western Europe.

Buyback and vision

Pepco has launched a €50 million share buyback program, sending a strong message to investors that the company is not just playing for survival, but wants to create value and grow profitably. As a result of the rethought brand strategy and regional focus, Pepco Hungary and other markets in the region will remain the company’s most important growth engines.