In a week of significant retail news, Poundland founder Steve Smith expressed regret at missing the opportunity to buy back his former business, which was recently sold to US investment firm Gordon Brothers. Meanwhile, AO World’s CEO John Roberts announced the potential closure of its loss-making contract mobile phone division, highlighting broader challenges in the electrical retail market and raising concerns about unsafe imported goods.
Key takeaways
- Poundland’s founder, Steve Smith, attempted to repurchase the company but was too late, expressing continued passion for the brand.
- AO World is considering shutting down its unprofitable contract mobile phone business within two months if a more viable deal with network providers isn’t secured.
- AO World’s CEO, John Roberts, raised alarms about unsafe electrical products being sold in the UK by online platforms like Temu.
Poundland founder’s missed opportunity
Steve Smith, who started Poundland from a market stall in Bilston and sold his shares for £250 million in 2006, revealed he tried to buy back the company when he learned it was for sale. Despite his attempt, the business, which operates 792 stores across the UK and Ireland and employs approximately 16,000 people, was acquired by US investment firm Gordon Brothers. Smith expressed sadness over the news of potential restructuring, including around 70 store closures and the closure of distribution centres in Darton and Bilston. He acknowledged the inevitability of price changes, stating that while customers value the £1 concept, adjustments are necessary for the business’s sustainability.
AO World’s mobile division in jeopardy
AO World, the online electrical retailer, is contemplating the closure of its loss-making contract mobile phone business. CEO John Roberts stated that the division could be shut down within two months unless a more profitable agreement is reached with network providers. This consideration follows a 40% drop in statutory profit to £20.6 million for the year ending March, partly due to a £19.6 million write-down on the mobile division. Roberts clarified that AO would continue to sell mobile phones and handsets, but the contract business, which bundles handsets with monthly payment plans, is under review. He also announced plans to launch AO’s own mobile network offering later this financial year and a new handset offer, bolstered by the recent £35 million acquisition of musicMagpie.
Concerns over unsafe electrical goods
John Roberts also voiced strong concerns about unsafe and cheap electrical products, which he described as "shite," being sold in the UK, particularly by Chinese competitors via online platforms. He specifically mentioned Temu, a Chinese-owned discount marketplace, for allegedly selling non-compliant electrical goods at ultra-low prices. Roberts criticised the government’s perceived inaction on enforcing legislation, stating that conversations with ministers on the matter have been fruitless. He highlighted the inherent dangers of electrical products and the unfair competition faced by compliant retailers.
