UK discount store Poundstretcher is set to open in Dubai.

The bargain-basement retail chain will open its first branch outside the UK at Madina Mall.

The chain plans to open a further six in the Gulf, after spotting a gap in the market for discount retailers, said Cliff Lomberg, general manager for Middle East and Africa.

“There is a gap in the market for discount retailers out there. We think we can make money,” said Lomberg.

Madina Mall in Deira is expected to open at the end of the month. Its Poundstretcher branch will be the first of four stores across the UAE, said Lomberg.

Poundstretcher saw its 2011 profits soar to GBP£1.4m (US$2.2m) against the previous year’s loss of GBP£7.1m in April.

It will be the first value retailer to expand outside of the UK and Ireland, Retail Week reported.