Poundland recently completed a restructuring program that involved shutting down almost 150 stores and laying off 2,200 employees. The budget retailer now operates 651 stores, reduced from approximately 800, with its workforce decreasing from 14,200 to around 12,000. As part of the overhaul, Poundland closed two warehouses located in Darton, South Yorkshire, and Springvale in Bilston, West Midlands.
In a bid to avoid administration, Poundland was sold for £1 to investment firm Gordon Brothers last June after receiving approval for its rescue plan, which included store closures, in the High Court in August. Poundland has confirmed the conclusion of its restructuring program but acknowledged that there is still much work to be done to return to a stable position.
The company stated that any future closures would result from typical business lease events expected at a retail chain with a large store network. Poundland reported a 2.9% decline in like-for-like underlying sales in the quarter ending December 28, attributed to price reductions aimed at reestablishing its focus on offering discounts. However, comparable store sales by volume increased by 2%.
In its first quarter, underlying earnings rose to £17.3 million, an increase of £8.4 million, aligning with expectations. Managing director Barry Williams emphasized the need for continued efforts in refocusing the business through lower prices and an improved product range, particularly in clothing, homewares, and grocery sections.
Poundland revamped its pricing strategy by reintroducing a simplified pricing structure of £1, £2, and £3 for grocery items across all its UK stores, with the majority of grocery products priced at £1. The company also discontinued certain categories, such as frozen foods and some chilled products, and ceased its online operations.
Additionally, Poundland is set to reintroduce in-house designed Pep&Co clothing to its UK and Ireland stores, offering 90% of items priced below £10. A nationwide advertising campaign will be launched next week to highlight the value of its product ranges.
As part of its ongoing efforts to improve performance, Poundland aims to enhance its offerings and maintain a customer-centric approach in the coming year.