limited company traded as lse plnd industry retail founded april 1990 founder dave dodd and steven smith headquarters willenhall west midlands united kingdom number of locations 800 1 key people kevin o byrne ceo products groceries consumer goods diy electrical revenue 997.8 million 2014 2 operating income 40.0 million 2014 2 profit 13.9 million 2014 2 owner fidelity investments 11 % kensico capital 5 % fil investments 5 % axa 5 % credit suisee securities 4 % other minor shareholders 70 % number of employees 10 020 2012 3 website http www.poundland.co.uk poundland 4 is a british variety store chain listed on the london stock exchange that sells most items in its stores for 1 . 5 established in april 1990 by dave dodd and stephen smith poundland stock about 3 000 6 home and kitchenware gift healthcare and other products across 16 categories many of which are brand name and clearance products . like many of its rivals poundland operates a constantly rotating product line with all products priced 1 . although price point retailing was invented in the united states during the 1870s the chain claims to have introduced this concept to europe 7 and is the largest single price discount retailer in europe . 8 the retailer claims that their croydon store is the busiest single priced discount outlet in the world generating more than 9 million in revenue per year with 30 000 customers a week which as of december 2008 was more than any of its yen and dollar counterparts in japan and the us respectively . 6 the company estimated in 2010 that it served 2.75 million customers in an average week . 9 poundland were reported in 2008 to have had strong sales growth and have maintained steady profit growth against increasing inflation . this among other factors was aided by a strong customer base of predominantly female shoppers every week in the c1 c2 d and e categories 10 the working classes in a system of demographic classification used in the united kingdom . the chain employs 10 020 staff and their company union is the union of shop distributive and allied workers usdaw . in 2015 poundland acquired rival 99p stores leaving poundworld as their closest competitor . in 2016 the company was described as struggling after its acquisition of 99p stores . before the purchase its share price had been 350p ; it dropped to 150p and the company was purchased in july 2016 by steinhoff for 597m 220p per share . 11 contents 1 history 1.1 formation 1.2 early 2000s 1.3 late 2000s economic crisis 1.4 management 1.5 recent history 2 business practice 2.1 sales strategy 2.2 products offered 2.3 store expansion 2.4 dealz 3 customers 4 competition 5 financial performance 6 criticism and customer perception 6.1 environmental concerns 6.2 health and safety 6.3 staff ban on wearing poppies 6.4 back to work scheme 6.5 prosecution for pest infestation 7 see also 8 references 9 external links history edit a poundland store in belfast a poundland store in peterborough poundland kings mall hammersmith london formation edit claiming to have introduced the concept of single price retailing dave dodd and stephen smith founded the retail chain in april 1990 5 with a starting capital of just 50 000 . 12 the first pilot store opened in december 1990 in the octagon centre burton upon trent after being turned down by big landlords who had reservations about allowing such a store to operate 12 given they could easily undercut every retailer in sight . it was soon followed by other stores most notably on the high street meadowhall . growth continued throughout the early 1990s with six stores by december 1991 and a further seven a year later . in 1995 smith failed to plan for more warehouse space and retail growth pushed their storage capacity past its limits . in the same year stock theft reached an unacceptable high . in response a new 130 000 square foot 12 000 m2 warehouse was built although at a cost of heavy profit losses from 850 000 in 1994 to 400 000 in 1995 . 12 the retailer managed to resolve their operational difficulties throughout 1996 when their new warehouse site became fully operational . early 2000s edit although enduring a troubled first few years poundland has since become a multimillion pound business with its 150th store opening in northampton in mid 2006 and a gross turnover of 311 million in 2007 up from 281m the previous year . 10 following a management buy out in 2002 the company has continued to grow with annual profit growth of 23.44 % 2007 7 and aims to continue its store expansion by 30 a year into 2009 overseen by james mccarthy . chairman colin smith speaking in april 2005 as poundland revealed it had invested 20 25 million in building a 300 000 square feet 28 000 m2 distribution centre said there was great scope for further growth saying we can clearly conceive this chain having 400 plus stores in future . 13 poundland operate a recycling initiative through which they will give money for old mobile phones while at the same time making charitable contributions and helping the environment . 14 late 2000s economic crisis edit poundland unlike many of its rivals have reported strong sales in a time of economic crisis with 2008 2009 revenue just short of 400m up from 330m for 2007 2008 . 6 despite this poundland has not been totally immune to the recession . the retailer has been forced to close down stores that are not financially viable even if well positioned . such was the case with their store in west ealing where it is believed high rental costs were one of the reasons why the company pulled out of the area . 15 although the chain has seen their strongest growth and sales during the recession ceo jim mccarthy notes that there is a common misconception that poundland is a better business in a recession when actually they re better during normal economic conditions but are very robust to manage well despite the state of the economy . 8 when the rate of vat was reduced in november 2008 to 15 % poundland s prices remained fixed at 1 by reason that they have kept the same single price point of 1 for 18 years and during that time have always absorbed duty and increased supplier costs without raising its price point . chief executive jim mccarthy said the chain will pass the savings on to customers in other ways . 16 with difficult economic conditions continuing into 2009 the supermarket retailer asda announced in january 2009 that they would cut the price of many of their branded products such as colgate toothpaste to just 1 in competition with poundland who are offering the same branded products at the 1 price point . in response poundland introduced multi buy offers to provide a larger quantity of the products for the same price of 1 . 17 the announcement comes after reports show that value retailers are seeing their sales and profits boom during the credit crunch with value conscious customers making the switch from traditional larger supermarket retailers for their everyday necessities . 6 the retailer had a good start into 2010 when they announced they had seen a surge in sales by nearly 35 % over the 2009 2010 festive period . 9 reports emerged in september 2008 that poundland s owners advent international were to put the retail chain up for sale with figures showing that value retailers are seeing business boom in the current economic climate . 18 these plans were confirmed in march 2010 when it was reported that barclays private equity has expressed an interest in a potential take over of poundland for about 200m although given that poundland is on track to increase its turnover and profit in the 2009 2010 financial year a higher price tag is possible . advent originally bought poundland in 2002 for 50 million and are reported to have hired close brothers to advise on its strategic options . 19 management edit in 2002 dave dodd co founder of the chain led a management buy out by advent international worth 47.5 m for 78 % of the company 7 where he received 304 000 making him worth some 25 million at that time . 5 the sale allowed for the company s accelerated growth expanding the store portfolio to well over 150 throughout the uk and creating an additional 500 jobs . 20 he became chief executive with a 12 % share in the business and brought in colin smith as chairman former chief executive of safeway . james mccarthy took over from dave dodd as chief executive of the value retailer in september 2006 . he joined poundland having been lured away as managing director at sainsbury s 21 with the offer of an attractive equity incentive that he will be able to cash in when the group s us owner advent international sells out . 22 recent history edit it was announced in september 2008 that poundland s owners advent international were planning on cashing in on the resurgence in value retailers by preparing to put the chain up for sale . the report came as figures showed that value retailers were seeing a business boom in the current economic climate . 18 these plans were confirmed in march 2010 when it was reported that barclays private equity had expressed an interest in a potential take over of poundland for about 200 million . 19 on tuesday 4 may 2010 it was announced that poundland had been sold to us private equity firm warburg pincus for 200 million . 23 in march 2014 the company was the subject of an initial public offering . 24 the company acquired 99p stores in 2015 which was followed by a drop in its share price from 350p to 150p ; in august 2016 the now struggling poundland was sold to the south african company steinhoff for 610 million . 11 the business has converted the 99p stores under the poundland brand while introducing poundland plus as new brand in the former family bargain stores which had been owned by 99p stores . 25 business practice edit poundland truck transporting goods from warehouses to poundland stores dhl exel supply chain announced in march 2008 that it won a new three year contract worth 9 million with poundland for transporting and supplying stock . 26 dhl will be importing consumer products from overseas countries such as china to transport them to poundland stores throughout the uk . dhl will transport a variety of products for poundland from uk outbases in billingham hatfield and bellshill . 26 sales strategy edit poundland promotes their sales strategy through their slogan yes everything s 1 . 12 by having a set price for all of their stock the company avoids the need to transmit pricing information to each store as well as the need to associate individual price tags with each item . 27 although the retailer encountered apprehension from some manufacturers worried about selling their brands in a discount environment the store offers the alternative of selling the products under their own in house brand . 27 running a store in which prices do not change presents challenges particularly with inflation as it would be difficult to change all the signs to read for example everything is 1.05 ; however inflation has also meant that some products which used to have an rrp below 1 and were thus cheaper to buy at other stores have increased in price and can now be sold for 1 while still offering customers value . 28 one other way the company deals with inflation is to decrease the amount of an item sold for 1 e.g. if the company is selling a number of