Poundstretcher in talks to close a ‘quarter of UK stores’ following lockdown

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Poundstretcher is reportedly in talks to close a quarter of its UK stores, in a restructuring plan that could place thousands of jobs at risk.

The chain is this week expected to unveil a new turnaround plan that will determine the fate of its 450 stores and entire workforce.

Under a company voluntary arrangement (CVA), up to a quarter of stores could close with rent negotiated at its remaining outlets.

Sources at Sky News said that under the CVA, 250 outlets would see rent paid in full for an initial six-week period, with their survival then reliant on whether they can secure rent cuts.

One method, which has been put forward by Pret a Manger and New Look, is for each store’s rent payment to reflect its individual sales.

The plans are being deliberated at a time of unprecedented high street turmoil, with many retailers drawing up plans for permanent shop closures, despite being allowed to reopen from Monday.

Poundstretcher employs 5,500 people across its stores, head office and warehouses.

The CVA proposals are being supervised by KPMG.

Most of its stores have remained open since the coronavirus pandemic struck Britain, because they sell food and medicines.

Despite continuing to trade, Poundstretcher opted not to pay landlords in March.

In a letter to landlords cited at the time by the Financial Times, the discounter said: “We need to take steps to protect the ongoing viability of our business, our employees and customers during this crisis.”

“The disruption from COVID-19 has impacted on people’s ability and willingness to continue to shop.”

In its most recent accounts, Poundsretcher owner Aziz Tayub said: “At the time of approval of the financial statements there are material uncertainties over the outcome of the cost reduction strategy that may cast doubt over the company’s ability to continue as a going concern.”

Poundstretcher has been contacted for comment.

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