In the 308-store chain's long-awaited annual report, published this week, CEO Aziz Tayub said previous attempts to move the business to a more mid-market position with the new Instore fascia had proved "flawed".
The presence of two different fascias had confused shoppers, he admitted.
Smaller high street Instores would return to the "historically successful" Poundstretcher brand, while larger out-of-town stores would be rebranded under a new fascia called Poundstretcher Extra.
The chain's pre-tax loss before exceptional items for the year to 28 February rose from £2.2m to £5.8m, while sales were marginally down 0.3% at £295.8m. Like-for-like sales fell 0.8%.
Tayub said the loss reflected "a period of fundamental repositioning and redevelopment" for the company, which was taken over by his wholesaling operation Crown Crest in July last year. A number of directors, including CEO Peter Burdon, the former Thorntons CEO, have left.
Crown Crest has since added an increased range of food and toiletries to stores and is rolling out a new store layout in order to make room for more ambient lines.