Future of bargain chain with 800 stores uncertain as it explores restructuring plan that could put shops at risk

ONE of the UK's biggest bargain chains is facing uncertainty arsenic it explores options that could enactment immoderate of its 800 stores astatine risk.

Poundland's proprietor has reportedly drafted successful advisors aft its latest trading update showed a income slump.

Pepco - the Polish genitor institution - is said to beryllium looking astatine "radical options" to code the issues astatine the chain, according to Sky News.

Bosses person hired consultants from AlixPartners arsenic it considers imaginable avenues, including a ceremonial restructuring process that could punctual "significant store closures", oregon adjacent an effort to merchantability the business.

Another enactment reportedly being considered is simply a institution voluntary statement (CVA).

A CVA allows firms to look astatine ways to prevention the business, specified arsenic reducing rent rates with landlords oregon closing stores.

It's important to enactment that nary decisions person been made and the main purpose is to amended Poundland's currency show and revive the chain's lawsuit proposition.

Stephan Borchert, main enforcement serviceman of Pepco Group, is expected to acceptable retired ceremonial plans for the aboriginal of the concatenation connected March 6.

The Sun has contacted Pepco and AlixPartners for comment.

It comes arsenic Pepco announced its trading results for the 3 months starring to December 31, with gross sliding by 9.3% astatine Poundland.

Bosses blamed a slowdown successful covering income for the dip and said it would enactment to get the affordable location and nutrient retailer "back connected track".

Mr Borchert said: "The radical delivered a mixed show successful its archetypal quarter.

"Poundland saw like-for-likes fall, mostly driven by continued underperformance successful covering and wide merchandise pursuing the modulation to Pepco-source product."

He added: "Getting Poundland back connected way is simply a cardinal precedence – we are undertaking a broad appraisal of the business and taking contiguous measures connected improving currency show and strengthening the lawsuit proposition."

It went connected to accidental that Poundland would not summation its store numbers implicit the existent fiscal twelvemonth arsenic it focuses connected improving sales.

The retailer lone opened 2 stores implicit the 4th and closed a full of 13.

A fig of section shoppers person already noticed the bargain retailer vanishing from their precocious street.

In October, Maidenhead residents were near heartbroken pursuing the closure of 1 of its branches.

Poundland on Maidenhead High Street volition adjacent for bully connected October 18 owed to failing to unafraid an statement with its landlord.

The retailer replaced what was erstwhile a Wilko back successful 2023.

At the clip locals branded the determination "a joke" and said Poundland's exit would permission the country similar a "ghost town".

This was connected apical of closures successful Sutton Coldfield connected October 5 and the closure of its Macclesfield site in August aft it was incapable to unafraid a caller lease agreement.

Poundland struggles

The news is indicative of the harsh retail clime which has plagued precocious streets up and down the UK successful caller years.

Rising costs coupled with shoppers tightening their purse strings person placed unit connected businesses and damaged sales.

Bargain retailers specified arsenic Poundland, B&M and Home Bargains, person performed amended than others acknowledgment to their debased terms point, but this has created rivalry.

Just this week, Poundland said it would summation the number of items which outgo £1 oregon less from astir 1,500 to astir 2,400 to entreaty to currency strapped shoppers.

The steadfast has besides been battling a emergence successful theft, with hundreds of employees present wearing bodycams to help catch criminals.

Today's study comes conscionable a period after Pepco said it was facing "a higher outgo outlook successful the UK pursuing the caller Budget" announced by Labour Chancellor Rachel Reeves.

Profits astatine the firm tumbled by £641million in the twelvemonth to September, with bosses again blaming dilatory income amid a mediocre outlook acknowledgment to measures acceptable retired by Reeves.

A spokesperson besides said the immense nonaccomplishment was "due to a non-cash impairment astatine Poundland that relates to the acquisition of the UK concatenation successful 2016".

Chancellor Rachel Reeves said during her autumn connection she would rise employers' National Insurance contributions (NICs).

She besides announced a simplification to the threshold astatine which businesses commencement paying NI contributions from £9,100 to £5,000.

It's estimated that the determination volition rise £25billion - the equivalent of astir £800 per worker for each firm.

At the aforesaid time, the minimum wage will rise to £12.21 an hr from April, and the minimum wage for radical aged 18-20 will rise to £10 an hour, an summation of £1.40.

The determination has been blasted by a fig of precocious thoroughfare stores, including Gregg's, Sainsbury's and Next and Halfords who said the determination could unit them to rise prices and further bruise the industry.

Trouble for bargain chains

Poundland isn't the lone British bargain concatenation facing issues astatine the moment.

The Original Factory Shop (TOFS), a beloved haunt for bargain-savvy Brits, is teetering connected the borderline of uncertainty.

Despite its popularity, the discount retailer hasn't managed to unafraid a buyer, raising concerns astir its future on the precocious street.

It's understood that Teneo, a strategical advisory firm, has been called successful to research each options, including different effort to flog the chain.

However, this could besides impact the imaginable of store closures oregon a institution restructuring.

Elsewhere, Shoe Zone announced backmost successful December that it will adjacent respective of its stores pursuing a Budget taxation hit.

It confirmed that the unviable branches would adjacent successful a trading update to investors.

The closures come aft it experienced "challenging trading conditions" successful the archetypal 2 months of the fiscal year.

It said user assurance had weakened further pursuing the October Budget erstwhile the Government announced the NICs hike and with the National Living Wage acceptable to beryllium increased this year.

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