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Shop Smart, Live Well ... Close Down

Posted on Jun 16, 2020. by NTI

One of the really fun things to do when on a shopping trip was to nip into Poundstretcher and innocently ask members of the long-suffering team of staff how much things were. There were times when you could buy 1700 KitKats Chunkies for a pound and others when you left with something that would later explode and take off an eyebrow. As of today cheap is less cheerful, as KPMG look to work with the Huddersfield-headquartered company to restructure its store portfolio, stemming losses from underperforming outlets, realigning head office costs and paving the way for investment in its core estate and product offering.

The company has 450 stores across the UK, and a distribution centre in Leicester, employing about 5,500 staff and under CVA proposals, the leases on 94 would be retained at current rents, 84 stores would have rents reduced by 30 and 40 per cent, for a period of three years, and 253 stores would have rents paid in full for an initial period of six weeks after which continued trading would depend on "the commercial merits of each store with the relevant landlords' collaboration".

The group has suffered during the lockdown, suffering from significant impacts to its profitability on several fronts over a prolonged period of time. Landlords around the country (and 23 stores are occupied under leases where the tenant is a connected company) are quivering at the prospect of one pound haircuts, as a CVA is considered to be the best and most sustainable route out. This is especially as so many other stalwarts of the High Street are less than gently feeling the squeeze.

How much for a six-pack of Colgate and a kilo of jelly beans now?

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