Poundland reassures staff amid Steinhoff accounting scandal

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Poundland employees have reportedly been sent a memo assuring them that the business is still doing well despite parent company Steinhoff’s accounting scandal.

According to Retail Week, an internal document circulated to the discount retailer’s staff sought to assure them that the fascia was performing strongly despite Steinhoff’s credit being downgraded in light of it postponing its full-year results because of “accounting irregularities” and the subsequent 80 per cent drop in its share price value.

The document – sent by Pepkor Europe chief operating officer Sean Cardinaal and Poundland managing director Barry Williams – said that “in just 12 months we’ve established a robust, profitable business generating cash and [are] trading more strongly than we have in many years”, Retail Week reported.

Last week also reportedly marked Poundland’s 34th week of consecutive like-for-like sales growth.

The retailer also said deliveries to its distribution centres continued to arrive and would continue to do so “into the New Year and beyond”.

The British discount chain was acquired by South Africa-based Steinhoff last year for £610 million.

Other UK retailers under the Steinhoff umbrella include Bensons for Beds and Harveys.

“We’re confident once insurers fully understand our position – trading strongly and independent of Steinhoff – they will be able to offer additional reassurances to our suppliers,” the internal document said.

It goes on to say: “Our strong performance is why we believe any action by credit insurers to make our life difficult for our suppliers is irrational.

“We certainly can understand why some of them are uneasy – we were as surprised as anyone by the events at Steinhoff – however, over the course of the next week we’ll be making it clear to those insurers through a series of meetings that this is a business with real momentum and one that’s at arm’s length from any issues within the parent company.

“We’re confident once insurers fully understand our position – trading strongly and independent of Steinhoff – they will be able to offer additional reassurances to our suppliers.

“In the meantime, we expect no impact on the business in terms of supply.”

Meanwhile, Steinhoff is reportedly due to meet lenders and credit insurers in London tomorrow to address concerns about the company’s long-term viability.

The conglomerate’s accounting scandal has already seen the departure of chief executive Markus Jooste and executive chairman Christo Weise.

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