Poundland Completes Major Restructuring, Closes 149 Stores and Cuts 2,200 Jobs

Poundland Concludes Extensive Restructuring Amidst Challenging Retail Landscape

UK discount retailer Poundland has announced the completion of a comprehensive restructuring plan, which involved the closure of 149 stores and the reduction of its workforce by 2,200 jobs. The move aims to stabilize the business following a period of significant financial challenges and intense competition within the retail sector.

Strategic Shift and Ownership Change

The restructuring initiative was first unveiled in June 2025, following Poundland's sale for £1 from Pepco Group to US restructuring specialist Gordon Brothers. Gordon Brothers pledged an investment of up to £80 million to revive the struggling retailer. The plan received High Court approval in August 2025. This strategic overhaul was necessitated by a £51 million pre-tax loss in 2024, attributed to weak trading conditions, unpopular clothing ranges, rising business rates, energy costs, and staffing expenses.

Refocusing on Core Value Proposition

As part of the turnaround, Poundland has significantly refocused its business model. A key element is the return to its core value proposition, with approximately 60% of its stock now priced at £1. The company has also ceased online sales and discontinued its Perks loyalty app. Furthermore, Poundland has withdrawn from selling frozen and most chilled food categories.

The restructuring also included the closure of two distribution centers, located in Darton, South Yorkshire, and Springvale, Bilston, with operations now consolidated at the remaining centers in Wigan and Harlow.

Relaunch of Pep & Co Clothing Brand

A notable development in Poundland's new strategy is the relaunch of its in-house designed Pep & Co clothing brand. Adult clothing ranges are expected to return to stores by the end of January 2026, with children's and baby wear following in February 2026. The company states that 90% of Pep & Co items will be priced below £10, and 45% will be under £5, aiming to offer accessible and affordable fashion.

Outlook and Management Commentary

Following these significant changes, Poundland reported an improvement in its financial performance, with underlying profits more than doubling to £17.3 million in the three months leading up to December 28, compared to the same period the previous year. While like-for-like sales saw a 2.9% drop in the quarter to December 28, like-for-like volume growth increased by 2% across all categories and 9% in revamped FMCG ranges.

Barry Williams, Poundland's managing director, confirmed that the large-scale store closures are now complete. He stated, 'While there's been significant progress as we re-focus and re-energise the business with lower prices and a sharper offer, we know we still have much to do.' Williams emphasized the company's ongoing focus in 2026 on delivering the ranges and price simplicity that customers desire across all store sections.