Poundland closed a further 11 shops across the UK last weekend, including its Southport branch, as the budget retailer pushes ahead with major restructuring plans following High Court approval of a scheme that saved it from administration just days before it was due to run out of money.
The discount chain shut stores on 31 August in Blackburn, Cookstown, Birmingham (Erdington), Nottingham (Kimberley), Horsham, Hull, Kettering, Omagh, Shepherd’s Bush, Southport, and Taunton, with approximately 1,000 workers affected by the closure programme that will ultimately see 68 shops permanently shuttered.
The closures come as Poundland confirmed it will return to simple £1, £2 and £3 grocery pricing across all its UK stores, marking a dramatic shift back to its roots after a five-month pilot in 17 West Midlands stores proved successful in cutting shoplifting by over 25 per cent.
Managing director Barry Williams said the simplified pricing structure, which will see around 60 per cent of grocery items priced at £1, represents what customers have been demanding “loud and clear” during the trial period. “We’ve heard them, and the clear success of our pilot is why I’m confident that a Poundland that’s focused on the simple value our customers expect has a bright future,” he stated.
The High Court approval on Tuesday 26 August came after barristers for the retailer warned Sir Alastair Norris that the company would be placed into administration by Friday and would run out of cash by 7 September without the restructuring plan. The scheme unlocks up to £60 million of new funding to keep the retailer afloat, adding to £30 million already invested by new owner Gordon Brothers.
The latest liquidity forecast shows that the group will run out of cash in the week ending September 7 2025,” Tom Smith KC told the court, representing Poundland Limited. The barrister explained that the retailer’s financial position had “significantly deteriorated during the last two years” and that it had “performed poorly in a difficult retail and economic environment.”
The restructuring represents a dramatic fall from grace for the Burton upon Trent-founded chain, which was sold by Pepco Group to Peach Bidco, a subsidiary of private equity firm Gordon Brothers, for just £1 in June. At the time of the sale, the company employed around 14,700 staff members and operated approximately 800 stores across the UK.
Under the court-approved plan, Poundland will also close its frozen and digital distribution centre at Darton, South Yorkshire, later this year and its national distribution centre at Springvale in Bilston, West Midlands, in early 2026, affecting a further 350 jobs. The company will withdraw from the retail sale of frozen food and reduce its chilled food offer to essentials such as milk and butter.
The retailer’s dramatic pricing overhaul forms a key part of recovery efforts under new ownership. Trial stores in the West Midlands showed that ending the sale of higher-priced items such as £5 dishwasher tablets helped reduce shoplifting significantly. Customer research indicated shoppers believed the pilot stores offered better value for money, with perception rising by 3 per cent, whilst wider range perception increased by 6 per cent and choice perception by 9 per cent.
The new pricing structure has already been extended to five stores outside the West Midlands, including Manchester’s Arndale Centre, Liverpool’s Lord Street, Hanley, Brixton, and Wandsworth. When complete across the estate, approximately 60 per cent of grocery items will be priced at £1, 20 per cent at £2, and 20 per cent at £3, with similar simplification planned for general merchandise and clothing ranges in coming months.
Williams acknowledged the difficult circumstances facing affected colleagues, stating: “Despite the opportunity this ruling provides, I’m extremely mindful of its consequences for our colleagues, especially those leaving us as we streamline our store estate, distribution network and support teams.
The restructuring plan includes significant rent reductions across multiple locations, with the company currently paying “higher than market rates for a significant number” of its sites, according to court submissions. The retailer’s £276.5 million loan repayments, originally due by 1 September, will be pushed back to 2028 under the plan, whilst a new £30 million overdraft facility will be provided.
Gordon Brothers, which previously owned Laura Ashley, has pledged up to £90 million in total funding to support the turnaround, including the initial £30 million invested at acquisition. Mark Newton-Jones, Gordon Brothers’ head of Europe, Middle East and Africa, expressed confidence in supporting the retailer’s recovery plan.
The closure programme will continue with 16 additional stores yet to be identified, with closure dates expected to be announced later in the year when staff will be informed. The restructuring aims to create an eventual network of around 650 to 700 stores, down from the current estate of approximately 800.
Poundland’s struggles reflect broader challenges in UK retail, with the company making a pre-tax loss of £35.7 million in the 2024 financial year. Pepco Group cited “highly challenging trading conditions” when it lowered profit guidance in May, with factors including increased National Insurance contributions and rising minimum wage costs adding pressure.
The restructuring does not cover Poundland’s operations in the Republic of Ireland and Isle of Man, where it trades as Dealz, nor does it affect trade suppliers or colleagues employed by the business in those territories. The court-sanctioned process applies only to UK creditors.
As part of broader recovery efforts, Poundland will also simplify its online presence, converting its website to a brand-only platform and retiring the Perks app. The company’s withdrawal from online sales is linked to the planned warehouse closures, with operations to be consolidated into hubs in Wigan and Harlow.
The retailer’s return to its founding principle of simple pound pricing marks a significant strategic shift after formally moving away from the one-pound-only model in 2019. Industry observers note that discount retail has become increasingly competitive since Poundland’s launch 35 years ago, with the rise of chains like Aldi and Lidl changing the landscape.
In the coming weeks we will focus on getting us back on track – revamping ranges, lowering prices and creating the simpler and more focused Poundland we know our customers are eager for us to deliver,” Williams said following the High Court ruling.
The Express reported that the weekend closures affected stores in key shopping areas including Merseyside’s Southport and London’s Shepherd’s Bush, underlining the significant impact on communities across the country as the restructuring plan takes effect.
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Image Credit:
Poundland, Market Jew Street, Penzance, Cornwall – June 2022 — photo by Mutney, taken on 5 June 2022, at 09:57:13in Penzance, Cornwall. Licensed under Creative Commons Attribution-ShareAlike 4.0 International (CC BY-SA 4.0)
