Poundstretcher has been sold to US investment firm Fortress, owner of Majestic Wine and Punch Pubs.
Fortress Investment Group, which bid unsuccessfully to buy Morrisons in 2021, will appoint former Morrisons group commercial director Andy Atkinson as Poundstretcher CEO.
Former Morrisons operating and finance chief Trevor Strain will also join the Poundstretcher board after the transaction completes, in a non-executive capacity.
Tristan Phillips, who was appointed CEO last year, will resume his former role as chief financial officer.
The equity-funded deal follows the retirement of outgoing Poundstretcher owner Aziz Tayub. Tayub had controlled the retail chain since 2008, when it became a subsidiary of Crown Crest Group, which he founded in 2006.
Fortress said it was committed to investment in Poundstretcher, which has 322 stores across the UK and 4,000 employees, and would listen to and engage with all stakeholders following completion of the transaction.
It said this would include building Poundstretcher’s supplier relationships in order to improve the shopping experience for customers, and investing to help Poundstretcher grow its reach across the UK.
“Poundstretcher is an exciting business in a critical part of the UK retail sector, and we recognise its importance to consumers across the country,” said Ahsan Aijaz, Fortress Investment Group MD and co-head of Private equity.
“We have long believed in the UK, and the consumer sector, as evidenced by our investments. We have a demonstrated history of investing in sponsored companies to drive growth, increase profitability and job creation – our plans for Poundstretcher are no different.
“Fortress believes in empowering management teams to deliver their strategy and we look forward to working with the team to invest in and grow Poundstretcher.”
Poundstretcher entered a company voluntary arrangement in a cost-cutting restructuring process in 2020, leading to the closure of unprofitable stores.
The retailer made a profit before tax of £13.5m in its 2023 financial year, down from £16.6m, on turnover of £245.5m, down from £273m.
The business shed over 1,000 retail staff – about one in five shopworkers – during its 2022 financial year.
Fortress said it had increased headcount at Majestic Wine and opened new stores since its purchase of the business in 2019.
Majestic acquired Vagabond Wines out of administration earlier this month, adding nine wine bars and saving 171 jobs.
Punch Pubs Group, which Fortress acquired in 2021, has 1,241 pubs across the UK.
Incoming Poundstretcher CEO Atkinson said: “Poundstretcher is an exciting business with huge potential, in a large, growing and resilient sector. We are committed to being long-term stewards of the business, investing to grow Poundstretcher and build on the great work established by Aziz and his team.”
Tayub said: “I am very pleased that the Fortress team will be providing the resources and investment needed to take Poundstretcher to its next stage of growth following my retirement.
“Fortress are well placed to work with the fantastic Poundstretcher team, who I’d like to thank for their hard work and dedication during the 18 years that we’ve grown the business together, and I look forward to watching and cheering their shared success in the years ahead.”
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