Poundland recently completed its restructuring effort, which included shutting down close to 150 stores and letting go of 2,200 employees. The discount retailer now operates 651 stores, down from approximately 800, and its workforce has decreased from 14,200 to about 12,000 individuals. As part of the overhaul, Poundland also closed two warehouses located in Darton, South Yorkshire, and Springvale in Bilston, West Midlands.
Last June, Poundland was acquired by investment firm Gordon Brothers for £1, avoiding administration following the approval of its rescue plan in the High Court in August. While Poundland announced the completion of its restructuring program, it cautioned that there is still significant work ahead to return to a stable position.
The company mentioned that any future store closures would be part of regular business lease events common for retailers with a large store network. Poundland’s latest financial figures indicate a 2.9% decline in like-for-like underlying sales in the quarter ending December 28, attributed to price reductions aimed at reinforcing its discount focus. However, comparable store sales by volume increased by 2%.
In the first quarter, underlying earnings rose to £17.3 million, an £8.4 million increase in line with expectations. Managing director Barry Williams acknowledged the progress made in revitalizing the business with lower prices and a more focused product range but emphasized the need for further improvement.
Poundland revamped its pricing strategy by simplifying its grocery pricing to £1, £2, and £3 across all UK stores, with the majority of grocery items priced at £1. The company also discontinued certain product categories such as frozen foods and selected chilled ranges, as well as discontinuing its online operations.
In a bid to enhance its offerings, Poundland is reintroducing its in-house designed Pep&Co clothing to stores in the UK and Ireland, with 90% of items priced below £10. Additionally, a nationwide advertising campaign is set to launch next week to showcase the value of its product ranges.