Poundstretcher expands with purchase of failed Alworths stores
Amid the gloom of Alworths’ collapse into administration last month, it seems that there’s now some good news. Retail Week is reporting that Alworths’ variety store rival, Poundstretcher, has bought 15 of the failed chain’s 17 stores.
Only the Llandudno and Evesham Alworths stores miss out – Poundstretcher already has a presence in the Welsh resort, and has recently been advertising jobs at what will presumably be a new store in the Worcestershire town.
The outcome seems like a positive result, saving the majority of Alworths’ jobs, and preventing the reappearance of empty stores on the high streets concerned. Indeed, the purchase includes several Alworths stores that had actually already closed their doors in the last few weeks.
The widely used ‘son of Woolworths’ tag reflected Alworths’ name and business model, as well as the fact that most – though not all – of its stores were former Woolies sites. Several more recent openings, including Newark, Maidenhead and Alloa, took over premises vacated following the collapse of the fashion chain Ethel Austin.
For Poundstretcher, the deal adds to the collection of ex-Woolworths stores that it has acquired already, which stretch from Scotland (North Berwick, Edinburgh) to Cornwall (Camborne) and Northern Ireland.
The fact remains, of course, that Poundstretcher is itself a lossmaking business. Back in July, I remarked that Poundstretcher’s parent company had racked up total pre-tax losses of more than £33m across the previous four years, and Retail Week has subsequently argued that the chain faces an “uphill struggle” to compete against “an impressive array of apparently more sophisticated and profitable value players.”
Today, we can certainly celebrate the good news of Poundstretcher’s acquisition of Alworths. However, the really hard work will be Poundstretcher proving that its business model is still viable, relevant and – crucially – profitable.
Full list of Alworths stores acquired by Poundstretcher:
- New Milton