Poundland hasn’t had a fantastic run of things over the past year or so. Its takeover of rival 99p Stores got bogged down in bureaucracy, its trading figures have been disappointing and its shares have lost half their value.
So it’s a shame (if not a coincidence) that its chief exec Jim McCarthy (pictured) is now retiring after 10 years in the role. The veteran retailer has transformed Poundland from a middling curiosity with less than 150 stores to a listed high street powerhouse with more than 900. ‘His energy, enthusiasm and passionate management style has touched many people during his successful tenure,’ gushed chairman Darren Shapland this morning.
On 1 July, McCarthy will hand over the reins to Kevin O’Byrne. The former CEO of B&Q UK has plenty of experience under his belt (including a stint as FD at Dixons) but will have plenty of challenges in his in-tray from day one.
While discount retailers have enjoyed a run of good fortune over the last few years, investors have very high expectations (as Poundland’s share price rout shows). Finding that next avenue of growth to keep up the momentum is going to be a challenge.
After the rigmarole surrounding the 99p Stores deal more big acquisitions (of rivals Wilko or Poundworld, for instance) seem unlikely – in the UK at least. Instead, O’Byrne will likely focus on international markets. Poundland already has a presence in Ireland and Spain in the form of its Dealz chain. Expanding that and making it work in other countries in Europe and beyond could be a decent source of bigger revenues.
As could getting into ecommerce in a bigger way. Poundland started selling online last September but with a range of just 2,000 items and a pretty hefty delivery charge of £4 on orders below £50. That will put off casual customers, but its stack ‘em high and sell ‘em cheap business model makes it difficult to approach online shopping in any other way. If O’Byrne can find more ways to make the most of what the digital world has to offer then that could prove fruitful too.
McCarthy might be feeling a bit emotional to be waving goodbye to his employer of the last decade but he can at least take heart from the fact its shares dipped as much as 3.4% this morning – suggesting he will be missed.