Another struggling retail chain suddenly closing dozens of stores
The troubled brand is also putting hundreds of jobs potentially at risk.
It's not exactly the best time in history to be a retailer.
To be sure, there have probably been worse times in the history of man.
Related: Huge retail chain suddenly closing 100s of stores, no bankruptcy
But the past five or so years haven't been the kindest to most stores. That's especially the case for brick-and-mortar retailers, which rely on robust foot traffic numbers just to keep profits afloat.
Think about one of your favorite — or at least most frequented — shops in your town. Maybe it's a hardware store, a clothing boutique, or a big-box warehouse club.
You might pop into that store every couple of weeks and pick up things you need.
The average ticket price at a big hardware store in 2024, for instance, was just over $100. But a sale of $100 every two weeks certainly isn't going to keep that store in business. In fact, it'll hardly even pay the bills.
This means that store must make those kinds of sales frequently and cater to all kinds of customers. Some have bigger needs, and some have smaller.
So that means the store must keep a wide variety of inventory in stock. It will also need to pay employees to help customers and keep the shelves stocked.
It will need to maintain aisles and facilities. It will need to clean, pay utilities, advertise, and constantly track and reorder inventory.
It's a pricey business, and it's not often the most lucrative venture. Image source: Shutterstock
Brick-and-mortar retail is struggling
Even in the best of times, the average brick-and-mortar store typically operates on a thin margin. But when unprecedented or unforeseen circumstances arise, things can get even dicier.
Consider the havoc Covid wrought on many small brick-and-mortar businesses across the U.S.
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- Popular fast-food burger chain closes all restaurants in key area
When many storefronts closed up shop for weeks or even months to wait out the worst of the pandemic, foot traffic obviously took a nose dive.
Without a steady stream of customers coming through retailers' doors to make purchases, profits also dropped.
This might have been doable for a day or two. But when retailers are forced to close for a prolonged period of time with seemingly no end in sight, the fight for survival is suddenly daunting.
As a result, many retailers closed permanently.
The American Bankruptcy Institute estimates that about 60% of retailers that closed during Covid never reopened.
Popular discount retailer closing stores
And this trend, while incredibly familiar to most Americans, isn't just constrained to the U.S.
Plenty of retailers — big and small — have encountered trouble over the last several years.
One such retailer is Poundland, the popular discount retail chain primarily clustered around UK travel hubs like bus and train stations.
In June, Poundland was sold by Pepco to Gordon Brothers for just £1. The firm said it would front an additional £80 to help clean up operations and right the business.
And now, Poundland is closing about 68 stores across the UK and Ireland, which will put about 1,000 jobs at risk.
Related: Another giant cosmetics brand closing store unexpectedly
Two distribution centers are also slotted for closure. They are in:
- Darton, South Yorkshire, UK
- Bilston, West Midlands UK
Poundland managing director Barry Williams called the closures "regrettable," but said there is much work to be done.
"While Poundland remains a strong brand, serving 20m-plus shoppers each year, our performance for a significant period has fallen short of our high standards and action is needed to enable the business to return to growth," he said.
Poundland operates about 792 stores and employs about 16,000 people. It has also indicated that more closures could be coming.
