Shares in discount variety retailer Reject Shop Ltd (ASX: TRS) are sinking this week down 0.2% to $7.58 at the time of writing despite the company's new homewares brand threatening to take down Wesfarmers Ltd's (ASX: WES) Kmart and German giant Aldi.
It all started with a stylish Scandinavian-style armchair – which is rumoured to be available in The Reject Shop stores soon, for a price even Kmart and Aldi can't beat, apparently.
With shoppers salivating over the upcoming homewares range out of The Reject Shop you'd think the share price would be on the up as sentiment surges, but news of court action over unsafe toy products that failed to meet Australian Standards may be dampening investor interest this week.
The Reject Shop announced its half-year results on February 21, with a 1.1% increase in NPAT to $17.7 million and FY18 NPAT guidance of between $16.5 million and $17.5 million, which is well above FY17 NPAT of $12.3 million.
The Reject Shop is no stranger to intense competition and the brand appears to have good customer following and if its homewares take off as expected, could be a real contender to squash the bigger names in the space.
