Poundworld

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Poundworld
Industry Retail
Fate Administration
Founded 1974
Founder Christopher Edwards Sr.
Defunct August 10th 2018
Number of locations
0 (8th August 2018)
Products Grocery, general merchandise
Owner TPG Capital
Number of employees
0
Website Closed

Poundworld was a British value variety store that sold most of its items for £1.[1] The chain was founded in 1974 by Yorkshire-based father-and-son team Chris Edwards Sr. and Chris Edwards Jr.[2] In contrast to many high street retailers,[3] Poundworld maintained strong sales and growth during the global recession that started in 2007.[4]

Poundworld's product range consisted of over 6,000 items including groceries, health and beauty, toiletries, cleaning products and pet care.[5] some of them known brands;[6] At its peak it had 335 stores in England, Wales, Scotland and Northern Ireland. In 2014, it was planning to open 150 new stores within three years.[7]

Its larger rival in the market was Poundland. A series on BBC One entitled Pound Shop Wars, broadcast between 2012 and 2015, concerned Poundworld and its rivals.

As well as all of its £1 lines, Poundworld introduced a range of multi-price products across its estate of stores in 2017 to offer customers 'More Choice, More Savings'.

Suffering intense competition from the addition of multi-price products, combined with difficulties arising from the weak pound, Poundworld entered administration in June 2018. Closing sales began in stores late that month. In July 2018, Poundworld confirmed that all stores were to close by 10 August 2018 after rescue talks with original founder Chris Edwards failed.

History

Poundworld store in Bradford
Poundworld, North End Road, Fulham, London

The chain originated in 1974, when Chris Edwards Sr. set up a market stall in his home town of Wakefield.[8] He initially set up a multi-price store called "Bargain Centre", before switching to a single-price format in 1997, trading as "Everything's £1".[9]

Since the recession that started in 2007, Poundworld has expanded rapidly.[10] Its sales grew by 42% between 2010 and 2011,[11] and increased by 55%, with revenues of £200m, in 2012.[10] Its expansion meant that the company required larger premises, and it relocated its head offices to the largest unit in Yorkshire's main warehousing and distribution base.[12] It also opened an overseas office in Shanghai during this period.[13]

In October 2013, Poundworld partnered with the Marie Curie Cancer Care charity, which it had already supported during 2013's Great Daffodil Appeal. To date, the company has raised in excess of £900,000 to help care for those (and their families) living with a terminal illness.[14]

In November 2013, Poundworld opened its first multi-price retail store, in Walsall, under the name Bargain Buys.[15] Bargain Buys was originally named (and briefly traded as) Discount UK, with the name change allowing the chain to compete more closely with its rivals in the market.[15] The company planned to open a further 100 stores in the next three years.[16]

In July 2014, the store secured a £26m loan from Santander to finance its stated aim of increasing its approximately 240 stores by 40 or 50 a year for the next three years, and to strengthen its overseas supply chain from where about 30% of its supplies are sourced.[7]

The Edwards (father and son) were placed at Number 12 in Management Today's annual list of Britain's Top 100 Entrepreneurs in October 2014.[17] In the same month, Poundworld Retail was named one of the United Kingdom's fastest growing retailers in the Sunday Times Grant Thornton Top Track 250.[18]

On 15 May 2015, the company announced that it had sold a majority stake in the business to private equity firm TPG Capital for £150 million,[19] with Christopher Edwards, his son, and other senior executives retaining a substantial minority holding, allowing the family to retain the day-to-day running of the business.[20] Poundworld announced that the investment from TPG would allow the business to grow, with further plans for store expansion.[21] Shortly after the deal, the company announced that it had begun construction of a new distribution centre in Normanton as part of a plan to create 4,000 jobs, and hoped to open a further 200 new stores in the next three years.[22][23]

Following a review of the business, TPG had proposed to put the company through a Company Voluntary Arrangement (CVA) to restructure the business by closing around 100 of its existing 355 stores. However, during the process, TPG was approached by third parties; it agreed in May 2018 to put the CVA process on hold, and to look at a sale of the business.[24] In June 2018, TPG pulled out of talks to buy Poundworld.[25]

On 20 July 2018, it was confirmed that all Poundworld stores were to close by 10 August.

Online

In May 2012, the company launched a wholesale website, targeted at market traders, eBay sellers and independent retailers.[26] The website offers over 2,000 products including cleaning, DIY, stationery and pet care.[27] Since launching online, the operation has seen a sales increase of 400%.[28]

The company followed this in February 2014 by launching a retail online pound store named poundshop.com.[29] Poundworld supplied stock and product images for the single price website – the first of its kind. However, Poundworld decided to leave the project after six months, citing "a failure to reach a shared vision" with Smith.[30] It launched another online shop in April 2015: Poundworld Plus,[31] offering over 4,000 products, all at £1.[32] It later changed the website name to Poundworld.co.uk.

Notable products

In June 2013, Poundworld launched a comfort bra priced at £1.[33] 100,000 were bought in a few hours.[33]

In November 2014, the company started selling a range of merchandise relating to Disney's film Frozen.[34] At Poundworld's new store opening in Merthyr Tydfil in October, people waited for over an hour before it opened; fights broke out as stocks ran low.[35] There were similar crowds at the new Nottingham store in November.[36]

ASA ruling on slogan

Former Poundworld logo with the "Everything £1" slogan

In October 2014, The Advertising Standards Authority (ASA) ruled that Poundworld's "Everything £1" slogan was misleading, as some items were priced at up to £8.99. Poundworld stated that the products in question were 'Manager Specials', and were only offered at Christmas and occasionally throughout the year.[37][38]

Pound Shop Wars

In 2012, the company was the subject of a BBC documentary series, Pound Shop Wars, that focused on the competition between Poundworld and its rivals.[39] After the initial hour-long pilot, the four-episode series was broadcast at the beginning of 2014.[40] A second series of eight episodes was screened in autumn 2015.[41]

Administration

After rescue talks with potential buyer R Capital failed, the company entered administration on 11 June 2018, the same day that electrical retailer Maplin became defunct. The administrators, Deloitte, continued to run the business as normal.[42]

On 19 June 2018, one hundred staff from the company's head office were made redundant.[43] A day later, the company began closing down sales at all of its over 300 stores, although they stated that no stores were "definitely" closing.[44] A further 20 head office staff were made redundant on 29 June 2018.[45]

After much speculation in the media, it emerged that the founder, Chris Edwards, was in talks to rescue the struggling business, but that there were bitter divisions between Edwards and the administrators, Deloitte.[46] The discussions appeared to come to a sudden conclusion on 5 July 2018, when it was reported[47] that Edwards' bid had been rejected, placing the future of the business in fresh doubt.

On 10 July 2018, Deloitte confirmed that 25 of the troubled retailer's stores would formally close.[48] The last day of trading for these stores was to be 15 July 2018, resulting in the loss of a reported 242 jobs.

A few days after this announcement, it was confirmed that another 80 stores would close[49], resulting in the loss of around 1,024 jobs. The 80 affected stores were to close on 22 July 2018.

On 17 July 2018, it was revealed a further 40 stores would be closing[50] costing another 531 jobs; the affected 40 stores were to close on 24 July 2018.

It was revealed on 19 July 2018 that the remaining 190 stores were to close on 10 August 2018, costing 2,339 jobs; after this date all 335 stores would be closed and Poundworld would cease to exist in the UK.[51]

References

  1. ^ "Poundworld leads the charge as single-price discounters lift off". thegrocer. 2012. 
  2. ^ "Poundworld Father And Son Entrepreneurs Head Yorkshire Contingency In MT Top 100 List". bdaily.co.uk. 2014. 
  3. ^ "Comet's collapse and other post-recession retail failures". 2012. 
  4. ^ "Pounding way out of recession". Johnston Press. 2011. 
  5. ^ "Categories Poundworld". poundworld.co.uk. 2014. 
  6. ^ "No wonder the middle classes are invading pound stores: From Balsamic vinegar and bird tables to spectacles and a range of pillows, they rival even John Lewis". 2014. 
  7. ^ a b "Poundworld to fund expansion with 26M loan package". The Grocer. 2014. 
  8. ^ "King of the bargains eyes bonanza". 2012. 
  9. ^ "Bargain Chain Poundworld Opens New Store". Newsquest. 2014. 
  10. ^ a b "Sales pass £200m at expanding Poundworld". Newsco Insider Limited. 2012. 
  11. ^ "Could It Be Magic No Just Hard Work Says Thriving Poundworld". The Grocer. 2011. 
  12. ^ "Poundworld looks for space to grow". Johnston Press. 2010. 
  13. ^ "Interview: Chris Edwards, Poundworld". How Did They Do It. 2013. 
  14. ^ "Poundworld Launches Campaign For Marie Curie". Newsquest. 2013. 
  15. ^ a b "Bargain Buys is new face of Discount UK". The Grocer. 2013. 
  16. ^ "New Bargain Buys fascia creates 80 jobs". M.E.N. Media. 2013. 
  17. ^ "Britain's Top 100 Entrepreneurs 2014: No. 12 - Chris and Chris Edwards, Poundworld". Haymarket Media Group Ltd. 2014. 
  18. ^ "Latest News". Poundworld Retail Ltd. 2015. 
  19. ^ "Poundworld sold to US firm for £150m - BBC.co.uk p.15 May 2015". Retrieved 16 May 2015. 
  20. ^ Shand, David (15 May 2015). "£150m buyout set to inflate Poundworld". 
  21. ^ Butler, Sarah (14 May 2015). "High street chain Poundworld sells majority stake to US investors". The Guardian. 
  22. ^ "Jobs boost at discount retailer". BBC News. 9 July 2015. 
  23. ^ Perrett, Michelle. "Poundworld to add 200 new stores nationwide". 
  24. ^ "Poundworld 'put up for sale'". BBC News. 12 May 2018. 
  25. ^ "Poundworld future in the balance after buyer pulls out". BBC News. 6 June 2018. 
  26. ^ "Poundworld hails launch of its discount wholesale website". The Grocer. 2012. 
  27. ^ "Discount Wholesale – Poundshop Supplier and Wholesaler UK – ITP Imports". 2014. 
  28. ^ "Sales up 400% for Poundworld's Discount Wholesale Website". The Grocer. 2013. 
  29. ^ "Poundworld launches online store poundshop.com this week". The Grocer. 2014. 
  30. ^ "Poundland founder's online venture suffers blow as partner quits". Guardian News Ltd. 2014. 
  31. ^ Hiscott, Graham (20 April 2015). "Poundworld have launched an online shop - but there's a catch". 
  32. ^ Bulletin, The Retail. "Poundworld unveils e-commerce website - The Retail Bulletin". The Retail Bulletin. 
  33. ^ a b "Would you wear a £1 bra? Poundworld launch world's cheapest bra . . . and say MILLIONS of cash-strapped women will snap it up". 2014. 
  34. ^ "Disney's Frozen: Merchandise coming to Nottingham Poundworld". Local World. 2014. 
  35. ^ "Let it go...or maybe not. Women seen fighting over Disney's Frozen merchandise at opening of new Poundworld store". Media Wales. 2014. 
  36. ^ "Poundworld swamped by crowds of desperate parents as Frozen merchandise goes on sale for Xmas - and sells out TEN MINUTES". 2014. 
  37. ^ "ASA Ruling on Poundworld Retail Ltd". Advertising Standards Agency. 8 October 2014. Retrieved 13 March 2016. 
  38. ^ "Poundworld's 'everything £1' claim banned by watchdog". 2014. 
  39. ^ "BBC One – Pound Shop Wars". BBC. 2014. 
  40. ^ "Pound Shop Wars (4 x 30' Series)". Zodiak Rights. 2014. 
  41. ^ "Nine Lives Media". Nine Lives Media. 2014. 
  42. ^ "5,000 retail jobs at risk as Poundworld rescue talks collapse". Sky News. Retrieved 11 June 2018. 
  43. ^ Sillars, James (19 June 2018). "Staff 'in tears' as first jobs cut after Poundworld collapse". Sky News. 
  44. ^ Kelly, Jon (30 June 2018). "BBC Stories: The death of a Poundworld". BBC News. 
  45. ^ "Poundworld to start 'closing down' sales". BBC News. 20 June 2018. 
  46. ^ Jahshan, Elias (2018-07-03). "Poundworld row escalates as administrators fire back at founder's accusations - Retail Gazette". Retail Gazette. Retrieved 2018-07-06. 
  47. ^ Stevens, Ben (2018-07-05). "3000 jobs back in danger as Poundworld rescue bid rejected - Retail Gazette". Retail Gazette. Retrieved 2018-07-06. 
  48. ^ Ltd, Insider Media. "Administrators confirm Poundworld store closures". Insider Media Ltd. Retrieved 2018-07-10. 
  49. ^ "Poundworld to close another 80 stores". BBC News. 2018-07-13. Retrieved 2018-07-17. 
  50. ^ "Poundworld to close 40 more stores". BBC News. 2018-07-17. Retrieved 2018-07-17. 
  51. ^ "Poundworld to disappear from High Street". BBC News. 2018-07-19. Retrieved 2018-07-19. 

External links

  • Poundworld Official website
  • Bargain Buys Official website
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