Poundstretcher is facing the prospect of administration if a restructuring plan is not approved, the High Court has heard. The discount retailer, which operates nearly 300 stores and employs 3,000 staff across the UK, was acquired by US investment firm Fortress in 2024.
Restructuring plan details
In March, the company proposed requesting landlords reduce rents across its store portfolio to safeguard its long-term future, stressing there would be no shop closures or redundancies. At a hearing on Wednesday, legal representatives stated that without approval, it would have insufficient funds to meet a funding requirement of £2.8 million due in the week beginning June 28, rising to £9.7 million in July.
Court submissions
Tom Smith KC, for Poundstretcher, said: "In those circumstances, the directors of the plan company will likely have no choice but to file for administration." He added that administrators would continue trading for a limited period to support a sale of stock. The restructuring plan aims to restore financial stability and implement a turnaround business plan.
Mr Smith informed the court that since 2020, the group's performance has deteriorated due to subdued customer confidence, rising operating costs, and inflationary pressures. The turnaround plan includes shifting the product mix to include more well-known household brands and optimising the store portfolio by opening stores in higher footfall locations.
The barrister said Poundstretcher's financial position is "poor and unprofitable", and if it entered administration rather than restructuring, it would likely be liquidated immediately.
Next steps
Mr Justice Hildyard ruled that the matter should proceed to creditor meetings on May 26. If creditors vote in favour, the plan will return to court for a sanction hearing on June 4. A Poundstretcher spokesperson said: "We welcome today's court decision. Our plan is focused on strengthening Poundstretcher's long-term position. There are no planned store closures or redundancies."
