// Poundstretcher kicks off review of its finances
// It said a cost-cutting strategy was the way forward for the loss-making retailer
// The majority of Poundstretcher’s 450 UK stores have remained open during the lockdown
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.
- Matalan & Poundstretcher under scrutiny over unpaid rents
- Boots & Poundstretcher in legal dispute over unpaid rent
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 discount chain has said that declining margins have taken a heavy toll on its balance sheet.
Poundstretcher, which is run by businessman Aziz Tayub, was struggling before 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 they would 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.