Discount variety pain
According to the NRF, Poundworld in the UK intends to close 117 of its 355 stores as a part of its company voluntary arrangement (CVA). The stores will close by August 31 this year and rent reductions will be sought for the remaining 231 locations. However, rental costs seem to be just one of Poundworld’s woes. It lost its credit insurance and suppliers started to demand payments immediately. Then, they complained about the Brexit-hit sterling, stock availability issues during Christmas, rising overheads including business rates and wages, as well as falling consumer spend. If all these are real, then the business is most likely broken beyond repair. We often wonder about the challenges faced by large discount variety retailers, who rely heavily on opportunistic purchases. What if sometimes there is simply not enough such stock around?