The discount retailer said it would have had “no choice” but to enter administration if the rescue plan wasn’t approved by the High Court, which has now given the chain permission to restructure
A major budget retailer has been rescued from collapse after a court gave the green light to a rescue package. Poundstretcher, which operates over 300 UK stores, had its restructuring plan approved today (June 13).
The development brings welcome relief for the chain, which insisted it would have had “no choice” but to enter administration if the deal had fallen through.
Poundstretcher has encountered serious difficulties since 2020 owing to hefty operational costs, inflationary pressures, and declining customer confidence. These ongoing struggles over recent years left the chain in an exceptionally precarious position.
Poundstretcher told the High Court earlier this year that it had “insufficient funds” for the £2.8 million owed in late June, and without any form of intervention, the bill would have soared to £9.7 million by the end of July.
The court was told that if the restructuring plan had been rejected, Poundstretcher would have had no alternative but to file for insolvency, with outlets staying open only until all remaining stock was cleared, reports the Express.
Now that the restructuring plan is underway, 300 of its outlets and 3,000 jobs have been secured.
Under the shake-up, landlords will be compelled to accept rent reductions, and in exchange, the discount chain must be dedicated to the operational turnaround, The Sun reports.
Poundstretcher has stated it will continue to invest in its product ranges, as well as its stores and overall customer experiences. It added that it wants to continue offering customers great products at great value.
Chief executive Andy Atkinson stated: “Today, our company is in a stronger position to continue investing in our stores, our people and the overall customer experience.
“Our priority now is exactly what it has always been – ensuring our customers across the UK have access to great products at great value.”
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