Poundland closed 80 stores last year, parent company reveals

In a trading update from its South African parent company, Steinhoff, it was revealed Poundland had shut 10 per cent of its more than 900 stores.

By September it was down to 834 in the UK, Ireland and Spain.

It was paying the price for its troubled takeover of 99p Stores in 2015. A six months delay due to a competition watchdog probe left many of the stores in a poor state.

The cost of converting them to Poundland hit profits and subsequently the business was bought by South African retail giant Steinhoff for £610 million in 2016

Since then Steinhoff has been caught up in a major accounting scandal that has seen both its chief executive and its billionaire chairman quit. In the trading update, Steinhoff's acting chair, Heather Stonn, said as a result of the crisis the group's essential working capital had "largely dried up".

But Poundland and Steinhoff's European arm secured their own vital refinancing last year, securing their future.

At the same time Poundland celebrated a record Christmas season, said the report, with 'robust' five per cent sales growth on a like-for-like basis, which strips out the impact of the drop in store numbers.

Overall sales were down five per cent to £455 million, but the group said this was "despite trading in 10 per cent fewer stores".

Founded by former market trader Steve Smith and his father from an upstairs office in Sedgley, the company is still based at its headquarters in Willenhall, employing around 700 people there and at its major warehouse in Bilston.

The Smith family sold up for £50 million in 2002 and the company went on to have a string of owners.

Since the Steinhoff takeover Poundland has started to move away from selling everything for £1, with the introduction of £2 and £5 products. This "continues to be successful" and will be extended this year, says Steinhoff.

It has also continued the roll-out of Pep&Co discount clothing outlets as stores-within-a-store at Poundland branches, with 21 added during the last three months of 2017. That gave it 132, with another 150 due this year.

Meanwhile Poundland's nine Dealz stores in Spain saw sales rise 10% on a like-for-like basis.

The business is now aiming to expand into Eastern Europe, opening 20 stores in Poland this year, alongside Steinhoff's existing Pepco chain.