Poundland plans to close 68 stores and two warehouses as part of a turnaround strategy, with reports estimating that between 1,000 and 2,000 jobs are at risk.

The budget chain, which was sold by Pepco to US retail investment firm Gordon Brothers for a nominal sum last week, has nearly 800 shops and employs approximately 16,000 people in the UK and Ireland.

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A digital and frozen distribution centre near Barnsley and another warehouse near Wolverhampton are set to close amid the restructuring plan. Two other logistics hubs in Wigan and Harlow are not affected.

Poundland said its Irish stores, which trade under the Dealz brand, will not be affected in the closures, which require UK court permission.

Managing director Barry Williams said: “It’s no secret that we have much work to do to get Poundland back on track.

“While Poundland remains a strong brand, serving 20 million-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.

“It’s sincerely regrettable that this plan includes the closure of stores and distribution centres, but it’s necessary if we’re to achieve our goal of securing the future of thousands of jobs and hundreds of stores.

“It goes without saying that if our plans are approved, we will do all we can to support colleagues who will be directly affected by the changes.”

Poundland said it will offer a “more streamlined” food operation, withdrawing from frozen food altogether, while its website will cease taking orders and will be for browsing only. It is also scrapping its “Perks” loyalty scheme.

The full turnaround strategy will see the number of stores falling to between 650 and 700.

Bally Auluk, national officer at the Usdaw union said: “Poundland has briefed Usdaw that they are now seeking permission from the court and UK creditors to close 68 stores, which they say have ‘no route to a return to profitability’ and streamline their distribution operations by closing the Springvale and Darton sites and transferring the work to existing facilities in Wigan and Harlow.

“We don’t at this stage know which stores are proposed for closure and we are aware that in the longer term the company could axe up to 150 stores.

“This is clearly devastating news for our members in Springvale and Darton distribution centres and a very worrying time for those working in stores. I am meeting the company this week to establish the process of meaningful consultation, as required by law, and establish which stores are under threat. In the meantime, we are providing our members with the support, advice and representation needed at this time of uncertainty.”

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