Black Country business tycoon secures £2m for online pound shop

Steve Smith's online discount retailer Poundshop.com, which is based in Dudley, is set to expand operations after receiving funding from investment group Foresight.

Willenhall-born Mr Smith founded Poundland with his father Keith in the early 1990s, before selling the business for £50m in 2000.

The multi-millionaire, who lives in Shropshire, said the cash boost would enable Poundshop.com to expand on its recent success by upgrading its IT systems, expanding warehousing capacity and increasing marketing capacity.

It comes after Poundland, which was sold last year to South African retailer Steinhoff International in a £597 million deal, announced it was stopping the sale of goods online.

Mr Smith said: "When I founded Poundland 26 years ago, everyone said it will never work, but belief and determination created the multi-billion pound retail industry we know today.

"In this relatively short space of time, retail has changed enormously with the introduction of e-commerce, each year more and more people are shopping online.

"My enthusiasm for shopper value has not changed and I am looking forward to taking single price shopping to the next level."

Mr Smith now runs the firm alongside his 21-year-old son, Ashley Smith, who is involved in the buying side of the business.

Donna Baker, chief executive of Poundshop.com, added: "Operating in this disruptive high growth sector is a privilege and it was especially important for me and my team to select a growth funding partner with the same vision and commitment to changing this retail space forever.

"Foresight's complimentary experience and management matches our forward thinking growth strategy and we look forward to developing this partnership further to the benefit of the budget conscious online shopper."

Mr Smith started out working on Bilston market with his family, and after setting up his first discount shop in West Bromwich, he went on to open up the first Poundland store in December 1990. It had turnover of more than £6m in its first year and grew at such a rapid rate that by the mid-1990's it had run out of warehouse space.

By the time Mr Smith sold the business at the turn of the century it employed more than 5,500 workers and had half a million customers every week. It now employs 18,000 people, has almost 900 stores and posted revenue of £1.3 billion last year. Poundshop.com was launched in February 2014 in partnership with Poundworld, with the aim of 'creating a vibrant discount retail market online.'