Poundland’s new owners could eventually close up to 150 stores as part of a restructuring of the budget chain.
The retailer, which operates more than 800 outlets in the UK and Ireland, was acquired by US investment group Gordon Brothers for £1 last week.
The restructuring plans will see 68 stores and two distribution centres in Springvale and Darton close in the short term, but this could rise to between 80 to 150 store closures.
According to reports, the retailer also wants landlords to cut rents to zero on up to 180 stores while also seeking rent reductions of between 15% and 75% on dozens more stores.
Bally Auluk, national officer at Usdaw, said: “Poundland has briefed Usdaw that they are now seeking permission from the court and UK creditors to close 68 stores, which they say have ‘no route to a return to profitability’ and streamline their distribution operations by closing the Springvale and Darton sites and transferring the work to existing facilities in Wigan and Harlow. We don’t at this stage know which stores are proposed for closure and we are aware that in the longer term the company could axe up to 150 stores. This is clearly devastating news for our members in Springvale and Darton distribution centres and a very worrying time for those working in stores.”
Barry Williams, managing director of Poundland, added: “It’s no secret that we have much work to do to get Poundland back on track. While Poundland remains a strong brand, serving 20 million-plus shoppers each year, our performance for a significant period has fallen short of our high standards and action is needed to enable the business to return to growth.
“It’s sincerely regrettable that this plan includes the closure of stores and distribution centres, but it’s necessary if we’re to achieve our goal of securing the future of thousands of jobs and hundreds of stores. It goes without saying that if our plans are approved, we will do all we can to support colleagues who will be directly affected by the changes.”
