Poundstretcher boss Angus Monro has swung the axe at his troubled chain and culled 15 per cent of head office staff.
Fifty people from the 350-strong HQ, mainly support and sales staff, were made redundant last week after poor Christmas trading. The retailer has issued two profit warnings in the past three months.
'Apart from the performance at Instore, our sales (over Christmas) were pretty crap. These redundancies are part of the normal cost reviews that happen at this time of year. Cost savings should significantly enhance profitability,' said Monro.
Last week, Poundstretcher, which is owned by Brown & Jackson, admitted that December had been 'difficult' - like-for-likes nosedived by 8.5 per cent - and that profits for the year would fall short of expectations. The only comfort came from the Instore fascia, which generated like-for-like growth of 12 per cent in December. Margins were also stronger than at Poundstretcher.
Investec analyst Mark Charnock believes the savings made from the job cuts amount to about£1 million. He noted: 'Another£500,000 (will come) from outsourcing some distribution functions, with the prospect of maybe another£2 million of savings.'
Other corrective action will include more aggressive promotions and improved operational support.
Jobs are on the line at several retailers, following what was a tough Christmas for many. Approximately 1,000 jobs are likely to go at Boots, while WHSmith chief executive Kate Swann is considering a swathe of redundancies following a profit warning earlier this month.
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