Dozens of Poundland stores are set to close after the struggling retailer secured court approval for a major shake-up – but is your local branch on the chopping block?
The discount chain narrowly avoided collapse after the High Court green-lit its rescue plan just days before it was due to run out of cash.
Back in June, Poundland announced it would permanently close 68 shops following its sale by Pepco Group to Peach Bidco, a subsidiary of private equity firm Gordon Brothers, for a nominal £1.
Under the approved plan, up to £60million in fresh funding will be pumped in to stabilise the business, with the Poundland chief calling the ruling ‘vitally important’ to ‘secure the future of hundreds of stores and thousands of jobs.’
The chain has already shuttered dozens of outlets, but the approval allows it to terminate leases early and push ahead with further closures, with the date set for August 31.
A further 16 are due to close, but the locations for these have not yet been identified.
It is understood that the closure dates for these are likely to be announced later in the year, when store workers will be informed.
Poundland has avoided being plunged into administration after its last-gasp rescue plan was approved by the High Court (File image)
The discount chain narrowly avoided collapse after the High Court green-lit its rescue plan just days before it was due to run out of cash
Following a restructuring plan being sanctioned, Barry Williams (pictured), Poundland’s managing director, said: ‘Today’s decision is vitally important for Poundland, allowing us to stabilise the business, securing the future of hundreds of stores and thousands of jobs.’
Poundland, founded in Burton upon Trent, Staffordshire, in 1990, has approximately 14,700 staff members and operates around 800 stores.
It was sold by Pepco Group to Peach Bidco, a subsidiary of private equity firm Gordon Brothers, for £1 in June.
The company then announced plans to shut 68 stores, which would affect around 1,000 staff.
Poundland also said it would close its frozen and digital distribution site at Darton, South Yorkshire, later this year and another warehouse at Springvale in Bilston, West Midlands, early next year, impacting a further 350 jobs.
Three stores closed before July this year, and 37 have closed this month, including in Newcastle, Leicester and Peterborough.
Another 11 stores, including those in Blackburn, Kettering and Taunton, are due to close on Sunday, and a further store, in Irvine, North Ayrshire, Scotland, will close on September 14.
A further 16 stores, which have not yet been confirmed, are also due to close.
Following a restructuring plan being sanctioned, Barry Williams, Poundland’s managing director, said: ‘Today’s decision is vitally important for Poundland, allowing us to stabilise the business, securing the future of hundreds of stores and thousands of jobs.
Poundland, founded in Burton upon Trent, Staffordshire, in 1990, has approximately 14,700 staff members and operates around 800 stores. (File image)
‘We’d like to thank the court, and the engagement of our creditors, throughout this process.
‘Despite the opportunity this ruling provides, I’m extremely mindful of its consequences for our colleagues, especially those leaving us as we streamline our store estate, distribution network and support teams.
‘We acknowledge the direct impact our plans have had on them and re-confirm our commitment to do all we can to support them.
‘Nevertheless, our wider attention must now turn to getting Poundland back to growth.
‘In the coming weeks we will focus on getting us back on track, revamping ranges, lowering prices and creating the simpler and more focused Poundland we know our customers are eager for us to deliver.’
In written submissions for the hearing on Tuesday, Tom Smith KC, for Poundland Limited, said that its ‘profitability has sharply declined’ in recent years.
He said: ‘The group was performing well prior to and during the Covid-19 pandemic.
‘However, the business has struggled in the last two years in an increasingly challenging UK retail environment.
‘Its response to these challenges was to broaden its offering, including by adding chilled and frozen products and introducing online sales.
‘However, these changes increased operating costs, as did increases in the UK national living wage and employer national insurance contributions.’
In court, he said a ‘very significant amount of new money’ would be injected into the company through the plan.
The scheme will also see Poundland given a £30m overdraft facility, and dates for the retailer to pay back loans pushed back to 2028.
Some of its rents will also be reduced under the plan.
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