Poundland 'on a roll' as bosses move to reassure workforce in wake of scandal at parent company
Poundland has moved to reassure its 18,000 workers that their business is in strong shape despite the crisis at its South African parent company, Steinhoff.
An accounting scandal at the South African retail giant has seen its chief executive and chairman both quit while it is having to restate its financial figures for the past two years.
There were reports at the weekend that a credit insurance company, which provides the cover for suppliers to ensure they get paid, was cutting back on its cover for Poundland. But the company says it will also be meeting with insurers to reassure them.
The Willenhall-based discount chain, bought by Steinhoff for £610m last year, said it is "a business firing on all cylinders at the moment".
A company spokesman said: "While we certainly can't predict the consequences for Steinhoff of the events of the last week, Poundland is a profitable, cash generating business that’s currently trading more strongly than it has in years - positive like-for-like sales and real momentum."
The company, with 900 stores, employs more than 700 in the Black Country at its Willenhall headquarters and its major depot at Bilston.
And Poundland bosses have said: "We expect no impact on the business in terms of supply. Deliveries are being made to our distribution centres today. They will be tomorrow. They will continue into the New Year and beyond."
Poundland's managing director Barry Williams, and the chief operator officer of Steinhoff's European arm Pepkor, Sean Cardinaal, have jointly written to staff to reassure them.
"In just 12 months we’ve re-established a robust, profitable business generating cash and trading more strongly than we have in many years," the letter tells staff.
"In fact, last week, we’re proud to be able to tell you we had our 34th consecutive week of like-for-like sales growth – not even the appalling weather at the beginning of the week could put a stop to our underlying momentum.
"Our strong performance is why we believe any action by credit insurers to make life difficult for our suppliers is irrational.
"We certainly can understand why some of them are uneasy – we were as surprised as anyone by the events at Steinhoff -however over the course of the next week we’ll be making clear to those insurers through a series of meetings that this is a business with real momentum and one that’s at arm’s length from any issues within the parent company.
"We’re confident once insurers fully understand our position - trading strongly and independent of Steinhoff - they will be able to offer additional reassurance to our suppliers.
"We will be working hard to ensure our stores will remain stocked and customers don’t notice a thing.
"Let us also be clear, while we can’t predict the consequences for Steinhoff because of events of the last 10 days, we are as excited today about the growth prospects for Poundland and Dealz as we were last month.
"Nothing that’s happening thousands of miles away in South Africa will change that.
"We’re excited about trading in this final week before Christmas this week and into the New Year. We’re on a roll and can count on your support to ensure we keep delighting the customers old and new in our stores."
