Discount retail chain Poundland has implemented a significant restructuring programme, resulting in the closure of 149 stores and the loss of 2,200 jobs. This dramatic shake-up follows a challenging period for the retailer, which recorded a substantial £51 million pre-tax loss in 2024.
Restructure Details and Strategic Shift
The closures form part of a comprehensive restructure that was first announced in June last year. The plan, developed after the company's financial downturn, included shutting at least 68 stores initially, with provisions for up to 80 additional closures. Beyond the store reductions, the restructuring involved several other significant changes to Poundland's operations.
The company has ceased its online sales operations and discontinued its Perks loyalty application. Additionally, Poundland has withdrawn from selling frozen foods and most chilled food items, marking a strategic shift away from these product categories. The retailer's frozen and digital distribution centre located in Darton, South Yorkshire, along with its national distribution centre at Springvale in Bilston, West Midlands, have both been closed as part of these operational changes.
Refocus on Core Offerings
Poundland has strategically refocused its business model, placing renewed emphasis on its traditional £1 price point items. The company reports that approximately 60% of its current stock is now priced at £1, representing a significant commitment to this value proposition. This move comes as the retailer seeks to re-establish its market position and appeal to cost-conscious consumers.
In another strategic development, Poundland is relaunching its Pep & Co clothing brand. This decision follows disappointing sales performance after the company switched to clothing ranges supplied by its former parent group. Adult clothing from the relaunched Pep & Co brand will be available in stores by the end of this month, with children's and baby wear lines scheduled to arrive in February.
Financial Performance and Market Challenges
Despite the store closures and job losses, Poundland has reported some positive financial indicators. Underlying profits more than doubled to £17.3 million in the three months ending 28 December compared to the same period the previous year. The number of items sold increased by 2%, suggesting some recovery in customer transactions.
However, sales at established stores fell by 2.9%, even when excluding goods that the company no longer sells. This indicates ongoing challenges in maintaining customer traffic and spending at remaining locations.
The company has faced a particularly difficult trading environment in recent years, grappling with rising costs across multiple areas including business rates, energy, and staffing. Intense competition has further complicated Poundland's market position, with pressure coming from various discount retailers including The Range, B&M Home Bargains, and Savers, as well as supermarkets and low-price online specialists such as Temu and Shein.
Industry Context and Future Outlook
The discount retail sector has experienced considerable consolidation in recent years. Major competitor Wilko collapsed in 2023, leaving only a few stores operating under The Range's ownership of the brand. Poundland's rival Poundstretcher was acquired in 2024 by Fortress, the owner of Majestic Wine, while Poundworld closed all 350 of its stores in 2018. Poundland itself previously acquired rival 99p Stores in 2015.
Barry Williams, Poundland's Managing Director, has confirmed that the significant store closure programme is now complete. "We have clear indications from the work we've already done, that we're on the right track," Williams stated. He acknowledged that while progress has been made in refocusing and re-energising the business with lower prices and a sharper offer, much work remains to be done.
Williams emphasised that sustainable turnaround cannot rely solely on cost management. He noted that customer feedback has indicated a desire for a simpler retail offer that maintains its promise of exceptional value. Accordingly, Poundland's focus in 2026 will be on delivering the ranges and price simplicity that customers want across all store categories, including clothing, homewares, and core grocery aisles.
Gordon Brothers, the US restructuring specialist that purchased Poundland for £1 from Pepco Group in June last year, has committed to investing up to £80 million to help turn the business around. The firm, which previously owned Laura Ashley, brings considerable experience in retail restructuring to the Poundland recovery effort.
Poundland, which was founded in 1990 with its first store in Burton upon Trent, continues to operate from two remaining distribution centres in Wigan and Harlow as it navigates this challenging period of transformation and seeks to re-establish its position in the competitive UK discount retail market.
