I know biggest mistake ailing Poundland made, says firm's ex-boss Steve Smith as he reveals he offered to rescue chain
GETTING POUNDED I know biggest mistake ailing Poundland made, says firm's ex-boss Steve Smith as he reveals he offered to rescue chain
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FORMER Poundland boss Steve Smith has revealed he offered to rescue the struggling high street chain four weeks ago.
But the multi-millionaire, who launched the bargain-hunter's paradise in 1990, was too late to save 68 shops which will now close following a major restructuring deal.
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Ex-Poundland boss Steve Smith has revealed he offered to rescue the struggling high street chain
Credit: Nigel Iskander
In an exclusive interview, Steve told The Sun on Sunday: 'I felt really sad when I heard the news. Poundland was my baby, really, so it's emotional for me.'
Steve came up with a rescue plan, but last week, Polish owner Pepco Group sold Poundland to US investment firm Gordon Brothers for £1 after a slump in trading.
'I wanted to help'
And he believes the downturn was a result of no longer having every item priced at a pound.
Over recent years, stores have introduced more expensive items such as cleaning products, frozen foods and multibuy deals.
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Steve Smith
He said: 'As I see it, there were a number of problems — crucially the decision to move away from the £1 an item formula.
'Another big issue is the state of the British high street.
'The Government has pushed up National Insurance payments, which cost businesses millions every year.
'Rates are going up, too, but the local councils don't even take away retailers' rubbish any more. Theft is another massive problem. In some places it has doubled in the last 18 months because we don't have enough police. As well as that, retailers have to deal with inadequate parking for customers.
'I would have introduced a loyalty points scheme for customers that offers them incentives like free parking.
'It feels to me like councils want to shut down the British high street.'
Walkthrough Poundland's first £1million store
When former market trader Steve, 63, turned 18 and wanted to launch a business of his own, his father Keith gave him the idea of starting up a shop where every item cost £1.
Together, the pair co- founded Poundland, opening their first shop in Burton upon Trent, Staffordshire, in December 1990.
It made an astonishing £13,000 on day one.
Steve went on to build an empire of hundreds of stores around the country and employed more than 8,000 people.
But the pressure of running a multi-million pound business took its toll.
In 2006, he took the tough decision to sell his final shares in the business for £250million.
I offered to buy back the company from the Pepco Group to turn it round, but they turned me down
Steve Smith
He said: 'I used to get up in the morning, my daughter was asleep, I used to get back home and she was asleep. Before I knew it, she was 16.'
But he admitted: 'It was as though somebody had died when we sold. I felt I had taken it as far as I could without further major investment, but when I heard the business was in trouble, of course I wanted to help.
'I offered to buy back the company from the Pepco Group to turn it round, but they turned me down.
'I was too late. I had the backing of some very wealthy entrepreneurs who wanted to invest — like me, they still believe in the concept and more importantly the people that work there.
'Now, the business I built into a multi-million pound company has been sold for £1, and it breaks my heart.
'So proud'
'I could see where it was going wrong and my parents would be spinning in their graves to see what has happened to our beloved business.
'They died within months of each other in 2022 and were so proud of the company, they even had a Poundland museum in their home.'
While around 650 stores will be saved by the new deal for now, a further 82 loss-making shops could be set to close their doors soon.
Poundland also plans to scale back its chilled range and close its frozen and digital distribution site at Darton, South Yorkshire, this year.
Another warehouse in Bilston, West Midlands, is to close in early 2026.
Around 1,000 shop staff and 350 warehouse workers in the UK will be affected by the Poundland restructure, but none in Ireland.
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