The new owner of value retailer Poundland said Tuesday it will close 68 stores and two distribution centres, as well as axeing sales of frozen foods and online sales.
But it has been reported that it’s likely to boost its clothing offer, particularly womenswear.
Gordon Brothers said the moves are “intended to deliver a financially sustainable operating model for the business after an extended period of underperformance”.
It’s reported that as many as 1,350 jobs are at risk out of the total of around 16,000 people that the chain employs. The company said its Irish Dealz chain won’t be affected by the closures.
It also confirmed that it was seeking rent reductions on a number of stores.
The news came after Sky News had earlier reported that the restructuring plan at the chain will see around 250 of its shops switching to paying no rent at all – if its plan is approved by the High Court.
Gordon Brothers plans to halt rent payments at hundreds of shops assuming court approval later this summer.
Those shops are the so-called Category C locations across the country with Sky saying that it has seen a letter sent to creditors showing that around 250 shops have been given this designation. The company also wants the right to terminate its leases with 30 days notice at around 70 of the loss-making stores that it classes as C2 (presumably those are the stores slated for closure), and with 60 days notice at another 180 sites.
But landlords could also activate break clauses in their contracts at an early stage if they’re able to find alternative retail tenants.
Poundland is also targeting rent reductions of between 15% and 75% at hundreds of other stores if the plan is approved. There’s no guidance so far on how many of the company shops will ultimately close.
The news organisation cited one source saying that a convening hearing has been scheduled for July and a sanction hearing, at which creditors will vote on the plan, for late August.
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