The Reject Shop to list on ASX

Deep discount store The Reject Shop joined the rush to list on the Australian Stock Exchange and will raise $44.1 million in an initial public offering with shares at $2 each.

But Reject Shop chief executive Barry Saunders made the point that he doesn't want to step on the toes of the big players in the retail sector.

"We seek to stay below the radar of the Big Ws and Kmarts," he said.

"We can do that by keeping out of apparel, by keeping a high degree of change in the ranges and by the size of our stores, seeking not to present an extreme threat to them.

"We think that's important and notice some of the bigger discount stores are trialing modules that bring them into more direct contact with those people."

Mr Saunders would be well aware how hard the big retailers can play - he has had senior roles at Target, Big W and Myer department store as well as being a former director at Coles Myer and Woolworths.

Chairman Brian Beattie spent 24 years with Coles Myer including managing director of Target for five years and MD of Coles Supermarkets for three years.

The Reject Shop's range includes food and grocery, leisure, home, and a segment tagged "social expression" which involves goods for seasonal events such as Christmas and Easter.

Mr Saunders said a broad spread of the community shopped at The Reject Shop, with the average customer only slightly below the general population in their income.

"What holds them altogether is that they are value conscious," he said.

He said Reject had been averaging 3.8 per cent growth over the past few years and had expanded from 45 stores five years ago to 101 today with plans to open eight to 12 stores a year.

The stores are concentrated in south eastern Australia with the first Queensland store to open on June 15.

Macquarie Bank Ltd has held a 66 per cent stake in The Reject Shop for 10 years and is set to sell its original investment of $9.8 million for $29.5 million.

Co-founder and Reject Shop director John Shuster will scale down his interest in the company from 18.2 per cent to 2.4 per cent after the IPO.

The retail offer, which opens on May 5 and closes on May 21, comes after strong institutional support which has resulted in a scaleback.