Poundland has implemented a sweeping restructuring plan, resulting in the closure of 149 stores and the loss of 2,200 jobs. This dramatic move comes in response to a challenging trading period that saw the discount retailer plunge to a £51 million pre-tax loss in 2024.
Refocusing on Core Offerings
The company, which was acquired for just £1 by US restructuring specialist Gordon Brothers from Pepco Group in June last year, has now refocused its strategy on its traditional strength: £1 items. Currently, 60% of Poundland's stock is priced at this iconic mark, signalling a return to its value-focused roots.
Relaunch of Pep & Co Clothing
In another significant development, Poundland is relaunching its Pep & Co clothing brand. This follows a previous switch to ranges supplied by its former parent group, which negatively impacted sales. Adult clothing lines will return to stores by the end of this month, with children's and baby wear scheduled to arrive in February.
Financial Performance and Strategic Shifts
Despite the store closures, Poundland reported that underlying profits more than doubled to £17.3 million in the three months to 28 December compared to the same period the previous year. The number of items sold increased by 2%, although like-for-like sales at established stores fell by 2.9%, even when excluding discontinued product lines.
The restructuring, first announced in June, included several key elements beyond store closures:
- Shutting at least 68 stores initially, with up to 80 additional closures
- Reducing rental costs across the estate
- Ceasing online sales operations
- Discontinuing the Perks loyalty application
- Removing frozen and most chilled food items from shelves
Distribution Network Changes
The company has closed its frozen and digital distribution centre in Darton, South Yorkshire, along with its national distribution centre at Springvale in Bilston, West Midlands. Two other distribution centres in Wigan and Harlow continue to operate, maintaining the retailer's supply chain capabilities.
Challenging Retail Environment
Founded in 1990 with its inaugural store in Burton upon Trent, Poundland has faced significant headwinds in recent years. Rising costs across business rates, energy, and staffing have been compounded by intense competition from rivals including The Range, B&M Home Bargains, Savers, major supermarkets, and low-price online specialists such as Temu and Shein.
The discount retail sector has witnessed considerable consolidation, most notably with the demise of major player Wilko in 2023. The Range subsequently acquired the Wilko brand, leaving only a handful of stores operational. Other competitors have also undergone changes: Poundstretcher was purchased in 2024 by Fortress, the owner of Majestic Wine, while Poundworld closed its 350 stores in 2018. Poundland itself acquired rival 99p Stores back in 2015.
Management Perspective and Future Plans
Barry Williams, Managing Director of Poundland, confirmed that the significant store closure programme has now concluded. "We have clear indications from the work we've already done, that we're on the right track," he stated.
"While there's been significant progress as we re-focus and re-energise the business with lower prices and a sharper offer, we know we still have much to do. Our focus on our costs has, without doubt, given us a platform for future growth, but no sustainable turnaround can be based on cost management alone."
Williams emphasised that customer feedback indicated a desire for a simpler offering that maintains its promise of exceptional value. "That's why our focus in 2026 will be on delivering the kind of ranges and price simplicity our customers want right across the store – in clothing, homewares as well as our core grocery aisles."
Investment for Recovery
Gordon Brothers, which previously owned Laura Ashley, has committed to investing up to £80 million in Poundland to support the business turnaround. This substantial investment underscores the belief in Poundland's potential for recovery and future growth within the competitive discount retail landscape.
