Review · Policy News
"When I told people what I wanted to do, open shops on the high street selling things for one pound, they said, 'how will you find products to sell for a pound, what about inflation, it will never work.'" That is how Steve Smith, the founder of Poundland, describes the genesis of the budget giant - which went on to employ thousands of people and see over a million customers a week - on his own website , external . But now the West Midlands-based retailer is teetering on the edge , after its US-based owners Gordon Brothers cut off a vital funding supply and rejected a takeover offer from Irish firm Martin Property Group. Having spent time on his parents' stall in Bilston Market from the age of two , Wolverhampton-born businessman Smith started out in the very same place - selling items for £1 from his own stall.
After a £50,000 loan from his parents he opened the first Poundland shop , in The Octagon Shopping Centre in Burton-upon-Trent, Staffordshire, on 13 December 1990. That first day, with a range of 624 products, the store took more than £13,000 - "and Poundland was born," Smith said. Smith and his wife, Tracey, owned the company for 16 years.
In 2006, he decided the time had come and he sold his final shares in the business for £250m, but later said the sale felt it was "as though somebody had died". Professor Sarah Montano, a retail expert from the University of Birmingham, said: "The real problem for Poundland is, when they first started it was really great because everything was £1, that was a really unique selling point for them. "[Today] there's competitors which are offering very similar prices and for quite a lot of products they're offering them cheaper." She added that some competitors had "really got their finger on the key trends".
In a statement, the board of Poundland Limited said it had been "working on a formal sale process for Poundland" and despite "enormous efforts it has not been possible to identify an acceptable offer for the business as a whole". "The process has however attracted several established retail operators who have made formal offers, collectively these cover a significant part of the business, and we believe offer the best available prospects for shareholders, creditors and to preserve jobs," they said. "We recognise any sale process creates uncertainty and particularly when set against a challenging UK economic environment." They also thanked "staff, suppliers and customers for their continued support".
Source: BBC
