Poundstretcher is closing a big box store in Newtown, Powys, in what looks like the start of landlords exercising a right to terminate leases over rent cuts.
Landlords of more than 100 stores were given the option to exit leases when Poundstretcher’s restructure plan was approved by High Court earlier this month, despite the retailer saying at the time that no closures were planned.
Rent for 55 stores was reduced by between 25% and 75% for up to three years, with landlords given the option to serve notice terminating leases within 60 days of the plan coming into effect on 4 June. Landlords of another 47 stores faced rent being cut to zero, with a rolling option to break leases from the effective date.
A sign left on the door of the Powys store last week said: “Dear customers, unfortunately this Poundstretcher site will be closing Saturday July 4th, due to our landlord serving notice.
“We apologise and would like to take opportunity to thank all our customers for your custom and support. It has been an absolute pleasure, and all the best in the future.”
Read more: Why did Poundstretcher need a restructure and what’s the plan to turn it around?
Poundstretcher has about 300 stores across the UK and employs around 3,000 people. The variety discounter was approached for comment on the closure of the Powys store.
Commenting when the restructure was approved on 12 June, Poundstretcher CEO Andy Atkinson said: “Today, our company is in a stronger position to continue investing in our stores, our people and the overall customer experience.
“Our priority now is exactly what it has always been – ensuring our customers across the UK have access to great products at great value.”
However, the judge was critical of the plan to restore the discount chain to growth following the restructure, including more range resetting, a shift to sourcing lines directly from the Far East, and store rotation. “This, I feel bound to say, has struck me as lacking the detail and particularity I would expect,” said Mr Justice Hildyard.
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