Budget high street chain Poundland has hit out at reports that big suppliers are changing their terms as new owners look for approval for big shake-up
Discount chain Poundland was forced to deny claims suppliers are “spooked” despite shoppers being met with gaps on shelves.
Reports say the high street firm is struggling to restock after a number of big suppliers allegedly toughened-up their terms. It comes after the struggling retailer was sold last month for less than £1 and its new owner swiftly proposed a shake-up that would result in the closure of 68 stores.
US investment firm Gordon Brothers is seeking court approval for a restructuring plan that would also include rent reductions on other shops. Warehouses in Darton in Barnsley and Bilston, West Mids, are planned to shut early next year. The firm, which has 800 shops, indicated dozens more could close in the coming years. The overhaul is expected to put more than 1,300 jobs at risk.
According to The Times, suppliers such as Procter & Gamble and Nestle have “tightened credit lines and payment windows amid uncertainty over the retailer’s future”, with some left “spooked”. They are said to have shortened window being between stock being delivered and the deadline for being paid.
The Mirror visited a Poundland branch in west London and found a number of gaps on shelves, including limited stocks of Sensodyne toothpaste, made by Haleon, and Ultimate Blends conditioner by Garnier, plus some cat and bird food.
Poundland hit back, with a spokesman claiming “most retailers have gaps from time to time and no doubt Poundland is no different, but there are no supply issues at Poundland related in any way to its current recovery programme.”
The Times found products made by Procter & Gamble, including Lenor fabric conditioner, Febreze sprays, Oral-B toothpaste and Always feminine hygiene products, were understocked in stores across London. But Poundland insisted Procter & Gamble had “never placed any restrictions on Poundland supply and Nestle actually increased their limits on Wednesday.”
They went on: “It’s ironic because on Wednesday Poundland briefed hundreds of suppliers in Walsall about the recovery plans and received very strong support. It’s very firmly business as usual despite the restructure plans. There has been no tightening of any limits since the acquisition by Gordon Brothers.”
Poundland’s previous owner, Pepco Group, put the chain up for sale in the face of falling sales and profits.
Following last month’s takeover, shopworkers’ union Usdaw asked Gordon Brothers for urgent talks to clarify its plan for the business, and what it might mean for its 16,000 staff.
Gordon Brothers pledged £80million of investment and will set out restructuring plans soon. Pepco will retain a minority stake in Poundland.