Poundstretcher sinks to loss before acquisition but now ‘well positioned’ for growth

Poundstretcher sank to a loss in the final year before its acquisition by US investment firm Fortress, but is now “well positioned” to grow, according to accounts at Companies House.

The retailer made a pre-tax loss of £9.8m in the year to 31 March 2024, slipping from a £5m profit the year before.

Turnover fell by £34m to £212m as it continued to restructure its estate following a CVA. 

The period included a number of one-off exceptional expenses, the biggest being £9.2m in migrating to a new warehouse management system and £5.3m in charitable donations. 

The number of stores also fell, from 324 to 314.

Poundstretcher shed 680 staff during the year – including 600 retail staff – to bring the total average monthly number of employees to 3,430.

Poundstretcher was sold to Fortress in April last year by long-time owner Aziz Tayub. The transaction saw Tayub retire from the business and former Morrisons group commercial director Andy Atkinson appointed Poundstretcher CEO by Fortress.

The new owners are “well positioned to build supply relationships, deliver low prices to customers across a wider range of products and brands, and increase the width of store offering within the UK”, according to the accounts.

Read more: Can Fortress unlock the potential within Poundstretcher?

Post year-end, the company has undertaken “a number of key strategic initiatives including product range reset, to include more household name products”. It has also invested in ensuring “everyday low pricing, and raising customer awareness of the brand” through social media activity.

A further 12 loss-making stores have been closed while eight have been opened and are “performing strongly”.

There have also been further changes to the management team, with a number of new roles filled.

A string of senior appointments in October included poaching Miles Foster from Morrisons as Poundstretcher’s new group operations director.

Further new roles have been identified “to continue this approach to strengthening our position and developing our offering”, according to the accounts.

A Poundstretcher spokesperson said: “These are historic accounts relating to the year ending March 2024, when Poundstretcher was under its previous ownership.

“The business was acquired by Fortress Investment Group in April 2024. Since then, we have appointed new management and made significant investment in the business. As a result, Poundstretcher is making strong strategic progress, and is well positioned to drive profitable growth.”