Peacock Group PLC, the UK-based discount clothing and homewares retailer, instigated a radical shake-up of its merchandising operation to avoid a repeat of last year's overbuying which led to a January profit warning, said chief executive Richard Kirk.

Speaking in an interview with AFX News following the release of full year results, Kirk said the company recruited David Pigeon from Matalan to be its new head of merchandising and appointed a further eight senior and middle managers to the function.

"They're now in place and we are seeing big improvements in our stock management system," he said.

Kirk conceded that the retailer had been under-resourced in merchandising. "We did realise that we could have perhaps done more ourselves to sort out the problem earlier."

The chief executive said Peacock has been far more prudent this year in its budgeting of like-for-like sales. "As of today our stock year-on-year is only 15 per cent up in value. I think that's pretty good when I look around at a lot of our competitors."

For the year to March 31 2001, Peacock reported a two per cent increase in pretax profit to £12.8m, on a 19.3 per cent increase in total sales to £234.9m. Like-for-like sales increased 2.3 per cent.

The retailer blamed its difficult year on unhelpful weather for the sales of almost every seasonal range, and an absence of compelling 'must have' fashion trends. In addition, the company suffered the impact of distress pricing by mid-market retailers clearing stock, notably C&A prior to its exit from the UK market and Bhs as part of its strategic re-positioning.