Poundstretcher could close more than 250 of its 450 UK stores, affecting over 2,000 jobs, as part of a rescue restructuring. The cut-price retailer, which also owns Bargain Buys, is asking landlords and creditors to back a creditors voluntary arrangement (CVA) to slash rents on 84 stores by over 30%.
The company said 253 outlets could potentially close if significant rent cuts or holidays cannot be agreed. A further 23 stores may also shut as Poundstretcher plans to put a subsidiary group owning the properties into administration.
Will Wright of KPMG, appointed to handle the CVA, said: “Poundstretcher has suffered from significant impacts to profitability on several fronts over a sustained period, which were then further exacerbated by the impact of Covid-19 on footfall. This CVA seeks to safeguard the long-term future of the business, across a smaller, more sustainable store estate.”
The move comes amid a wave of retail restructures, with Debenhams, Monsoon Accessorize, Cath Kidston, Laura Ashley, Victoria’s Secret UK, Oasis and Warehouse all calling in administrators since March. Poundstretcher creditors have until 2 July to vote on the CVA, which requires approval from those representing at least 75% of the company’s debt value.
Founded in 1981, Poundstretcher employs over 5,500 people but faces heavy competition from B&M, Poundland and Home Bargains. Last year sales rose 12% to £434m but the group sank to a loss of £227,000 from a £2m profit the year before.
