Smell of success for £2 shop

A sharp-eyed Black Country entrepreneur has bucked the dismal High Street spending trend after shoppers sniffed out a bargain at his ground-breaking store.

The everything-for-£2 stores chain Only2 has beaten the spending slump thanks to a toileteries gift pack.

Launched by former Poundland owner Steve Smith, the store has opened half a dozen shops, including one in Brierley Hill, and set up headquarters in Walsall.Managing director Gerry Loughran said he expected the company to hit a turnover of up to £13 million in its first year - and possibly £16 million with three new stores planned.

"Christmas has been very good for us," he said. "Our best seller was an Adidas gift pack, containing deodorant and shower gel. It normally retailed at £4.99 but we were selling it at just £2 and sold thousands of them.

"If we had 30 stores, we could have sold tens of thousands. It was the right product at the right price at the right time.

"We also did very well with a golden Christmas wreath, about a foot across. Other popular items included a pack of 20 Ronson lighters, £2.99 packs of Ferrero Roche chocolates, and six-packs of 500ml bottles of Coke - all selling for £2 of course."

Only2 was launched last year by Mr Loughran and Mr Smith as a "next step" from the £1-for-all store concept they had pioneered in the 1990s.

Mr Smith and his father had been bought out of their Poundland business in a £50 million deal in 2002 and Only2 marks his return to the high street.

The hub of the operation is the newly acquired 45,000 sq ft warehouse in Talbot Close, Walsall. In the run-up to Christmas it was operating 12 hours a day, six days a week but Mr Loughran said the eventual aim was to have it running on three shifts, 24 hours-a-day.

"It takes around 30 pallet-loads to fit out one of our stores," he said.

By Simon Penfold