Poundland has revealed the location of a further 12 stores it plans to shut in the coming weeks, bringing the total number of confirmed closures to 52 as part of its new owners’ recovery strategy for the struggling discounter.
They are among the 68 stores that have initially been earmarked for closure in the restructuring plan drawn up by investment firm Gordon Brothers after it acquired the retailer from Pepco Group for a nominal sum in June. The plan also includes closing two distribution centres, seeking rent reductions at other stores, discontinuing its online operations, retiring its Perks loyalty scheme, and reducing its food offerings.
Thirteen of the 68 have closed so far, including 10 on 10th August. Poundland also recently confirmed the location of 15 closing on 17th August, and 12 that will cease trading on 24th August.
Of the next 12 to close, 11 will be shut on 31st August and one on 14th September. They include sites located in Blackburn, Cookstown, Birmingham, Nottingham, Horsham, Hull, Kettering, Omagh, Shepherds Bush, Southport, Taunton, and Irvine.
Poundland remains tied to leases on closed stores until its restructuring plan receives approval from the High Court and creditors at a hearing scheduled for 26th August.
The retailer has stated that it anticipates further closures over time as leases expire, with its estate eventually shrinking from approximately 800 to between 650 and 700.
Gordon Brothers has agreed to invest £80m in its turnaround plan for Poundland, which is being led by its Managing Director, Barry Williams, who returned to the business earlier this year. A recent trading update from Pepco Group revealed that Poundland’s revenues plummeted 10.3% to €347m in the quarter to 30 June, with like-for-likes falling 7.1%. During the period, the Poundland estate shrank from 818 stores to 799.
Meanwhile, it was also announced yesterday that Hobbycraft is closing another nine of its 115 stores as part of a restructuring effort by its owner.
It recent days, the arts and crafts retailer has shut three shops in Bromborough, Stratford-upon-Avon, and Southport, with six others in Wigan, Chichester, Stafford, Maidenhead, Crayford, and Kings Lynn closing next month.
Private equity firm owner Modella Capital launched the overhaul of Hobbycraft after buying it in August last year. Nine other stores ceased trading last month, with the restructuring also resulting in redundancies across its Bournemouth head office and Burton-on-Trent distribution centre.
The shake-up is intended to help secure the future of at least 99 stores and 1,800 jobs across the business.
Hobbycraft’s Chief Executive, Alex Wilson, said earlier this year: “Very sadly, the strength of our offering has not made us immune from the challenges faced by the retail sector in recent years. Closing stores is always a last resort and this has been an extremely difficult decision.
“Making these changes is sadly a necessary action to enable us to keep our doors open to crafters up and down the country.”
NAM Implications:
- The Poundland ‘cut to fit’ policy continues…
- …and will inevitably continue until an estate size is reached that can trade profitably.
- A game of ‘wait & see’ for suppliers?
- Meanwhile, the same story (albeit on a smaller scale) for Hobbycraft…
