Poundstretcher store closures likely as KPMG is drafted in

Poundstretcher KPMG Covid-19 Aziz Tayub

The discount retailer has hired KPMG advisers to review options and strengthen its balance sheet

Poundstretcher has reportedly drafted in KPMG advisers to begin a review of the business’ finances amid the coronavirus pandemic.

The discount retailer has hired advisers to review options and strengthen its balance sheet, Sky News reported.

In its latest accounts, Poundstretcher warned that a cost-cutting strategy was crucial to ensuring that the struggling retailer has a future on the high street.

The retailer has 450 stores in the UK and has seen the majority remain open during lockdown because it sells food and medicine.

However, the company has said that declining margins have taken a heavy toll on its balance sheet.

Poundstretcher, which is run by businessman Aziz Tayub, was struggling prior to the coronavirus pandemic.

Accounts filed earlier this month revealed the retailer had swung to a pre-tax loss of £227,000 on more than £430 million of sales for the year to March 31.

It had closed 16 stores last year and opened 72.

Poundstretcher now hopes that KPMG’s review of options will provide measures such as closing unprofitable stores, although it is uncertain whether Tayub is seeking to sell the business.

Earlier this month, Poundstretcher’s landlords warned that they will launch legal proceedings against the discount chain for refusing to pay rent.

Poundstretcher wrote to landlords in early April to inform them it would not pay rent or service charges for at least a month.

The retailer’s woes worsened when earlier this week it revealed it was facing three separate claims from L&C Investments, Sheet Anchor Investments and Black Office.

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