Business

Poundstretcher buys failed discount chain JTF, saving 230 jobs

The owner of Poundstretcher has bought the failed JTF discount chain out of administration – securing the jobs of 230 people and announcing plans to open 15 more branches.

The new owners plan to reopen the first of the 10 JTF stores in Tamworth this Friday.

Stores in Stoke, Leeds, Kidderminster and Newcastle-on-Tyne will open in the next few weeks, followed by Barrow-in-Furness, Hucknall in Notts, Preston, Lincoln and Hull.

Poundstretcher co-owner and chief executive Aziz Tayub said the deal to take over the business from the administrator was struck last Wednesday and they already had plans to open another 15 JTF branches by next spring.

He said his business had bought the intellectual property and naming rights of JTF, which operates on membership clubcard system, including its online operation.

Nottinghamshire-based JTF Mega Discount Warehouse collapsed earlier this summer when a deal to sell the business fell through. Some 500 jobs were affected.

A statement issued on behalf of the company at the time said that the pandemic had played a big role in its demise, with the forced closure of stores wiping out fireworks and Christmas sales which were “two of the largest seasonal items for JTF”.

Mr Tayub said JTF had faced major stock shortages, whereas the Poundstretcher group, he said, had £200 million of stock split between the warehouse at its Leicestershire head office and its 400 stores.

He said: “We’re delighted to welcome JTF to our Poundstretcher family and to be working with the 200-or-so staff in the business.

“We’ve acquired the leases of 10 stores and will be reopening them in the coming weeks.

“We are recruiting most of the workforce back, apart from one manager who has found another job.

“The aim is to have 24,000 different product lines on sale, as well as online under the JTF brand.”

He said JTF stores typically covered 48,000 sq ft, compared to about 20,000 sq ft for Poundstretcher branches

He said they were currently putting £1.5 million of stock into the 10 stores and investing about £500,000 fitting each one out.

Selling online is a departure for Poundstretcher which has stuck to its bricks and mortar stores, and Mr Tayub said JTF has some 3 million people on its database.

He said: “JTF were doing well two years ago but things went downhill to the point where trade was almost half of where it was in 2019.

“We will have good prices compared to their old prices, and a good range of products and more being added on a daily basis. It was not a lack of customers, but a lack of stock that affected the business.

“Some of the Poundstretcher stock will go into the stores but there’s a big range that we’ve started bringing in already for them.

“Our future plans are to open another 15 JTF stores by the end of March next year, including Washington, Warrington, Walsall and South Wales, and we are already in negotiations over half a dozen of them.”

Poundstretcher operations director Shehzad Tayub said: “Staff have told us that they have not seen this level of stock on the shelves since the heyday of JTF’s trading days.”

Poundstretcher property and legal director Gerry Loughran said: “JTF has very experienced managers, with great product knowledge which will help us take the business back to where it was.

“And its loyal customer database means we can target those 3 million people.”

Poundstretcher, itself, was forced into a CVA in 2020 because of crippling rents, but has seen an £80 million turnaround in profits in the space of just one year.

The business made pre-tax profits of £30 million in the 12 months to March, this year, after renegotiating rents, closing loss-making stores and laying off around 200-250 shop staff.

By comparison, the chain made a loss of £49.5 million in the year to March, 2020.

Mr Tayub said Poundstretcher could even go on to make £40 million in pre-tax profits in the current trading year, with plans to open 40 new stores during the period.

It has almost 400 stores – compared to 450 pre-the CVA – and about 5,500 staff, and the turnaround came despite sales falling from £434 million to £325 million in the space of two years.

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