Poundland recently completed a restructure that involved shutting down nearly 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 around 12,000. As part of the restructuring, Poundland also closed two warehouses located in Darton, South Yorkshire, and Springvale in Bilston, West Midlands.
Last year, investment firm Gordon Brothers acquired Poundland for a nominal fee of £1. The retailer avoided administration after receiving approval for its rescue plan, which included store closures, in the High Court in August. Poundland stated that its restructure program has been completed, but it emphasized that there is still work to be done to achieve its goals.
Moving forward, Poundland mentioned that any future store closures would be due to regular lease events typical for a retailer with a large store network. Despite a 2.9% decrease in like-for-like underlying sales in the quarter ending on December 28, Poundland saw a 2% increase in comparable store sales by volume after implementing price reductions to focus on its discount strategy. The company reported underlying earnings of £17.3 million in the first quarter, an £8.4 million increase in line with expectations.
Barry Williams, the managing director of Poundland, acknowledged the progress made in revitalizing the business through lower prices and an enhanced product range but emphasized the need for further improvements. In the upcoming year, Poundland aims to concentrate on providing the desired product ranges and pricing simplicity for customers across its stores.
To streamline its operations, Poundland reverted to a straightforward pricing structure of £1, £2, and £3 for grocery items in all UK stores, with the majority priced at £1. The retailer eliminated certain categories like frozen foods and some chilled products while discontinuing its online services. Poundland is reintroducing its Pep&Co clothing line in the UK and Ireland stores, with most items priced below £10. Additionally, a nationwide advertising campaign is set to launch next week to highlight the value of its product offerings.