Reject Shop to raise $40m for new stores DISCOUNT chain The Reject Shop is defying the retail squeeze and hitting its shareholders for $40 million to continue its roll-out of new stores across the nation. The company also posted 6.2 per cent comparable sales growth for the third quarter despite it saying the tough trading conditions were ongoing. Managing director Chris Bryce says the company decided to start rapidly expanding across Australia about four to five years ago. "At that stage we had 150 stores and we thought across Australia we could probably expand our store portfolio to 400 or even more stores," he said. The Reject Shop had been opening about 20 stores a year, but in 2013 it was able to buy stores previously owned by collapsed discount retailer Retail Adventures which traded under Crazy Clark's, Chickenfeed, Go-Lo and Sam's Warehouse. The Reject Shop has opened 35 stores this financial year with a further five scheduled for the fourth quarter, taking the total to 270 by June 2013. It also has the opportunity to open a further 40 stores in financial 2014. While Mr Bryce said retail trading conditions in Australia remain tough he believed that The Reject Shop's business model would ensure it continued to perform well. "Whilst trading conditions over the next couple of years, and certainly this year, will remain relatively subdued our business model can sustain profitability over tough times and when things change we will be well positioned to take advantage of that," he said. Mr Bryce said when consumer confidence was low shoppers tended to remain loyal to stores and brands they knew well but he did acknowledge that the bargain prices at The Reject Shop were an asset in tough times. "I think people by and large remain where they shop, they may just spend a little less," he said. However, from an overall price proposition we do offer customers the opportunity to save money. He said the store roll out could have been funded by cashflow and expanding the company's credit arrangements, the company decided raising $40 million in capital would also ensure its long term growth. "It will also ensure we are well positioned to continue to invest in infrastructure and staff to support our longer term growth plans," he said. The Reject Shop shares went into a trading halt on Tuesday morning and last traded at $16.72.