25 years of the Poundland empire
Tomorrow morning Jim McCarthy, the chief executive of Poundland, will bury a time capsule at the chain's Willenhall headquarters and release a flight of balloons to mark the beginning of celebrations of its 25th anniversary.
It marks a major milestone in a remarkable story that began with a box of bits and pieces on a stall in Bilston market. Today it has replaced Woolworths as the nation's go-to budget store.
It has made fortunes for the father and son who came up with the idea and 25 years later its shares are bought and sold on the London Stock Exchange, valuing the business at nearly £800 million.
Poundland has become one of the biggest success stories to ever come out of the Black Country and, as it marks its quarter century, the £1-for-everything chain is on track for even more growth.
Mr McCarthy, whose four per cent stake in the business makes him a multi-millionaire on paper, has a declared aim of 1,000 stores in the UK.
That is with or without the 250, 99p Stores Poundland is trying to buy at the moment. That plan has suffered a major hiccup after the UK's competition watchdog called it in for a months-long inquiry which may not make a decision until October.
Mr McCarthy is going to try and persuade the watchdog to let him keep most of the 99p Stores, rather than selling off up to a third, but win or lose, Poundland is on track to overtake Woolworth's total of 1,141 stores on the UK high street back in the late 1960s.
1990: Poundland opened its first store in Burton Upon Trent's Octagon Centre. At the time founder Steve Smith was working out of a first floor office over the indoor market in Sedgley with a second-hand fax machine and an old desk.
1991: Poundland opens a store at the Meadowhall shopping centre in Sheffield. In its first week the new branch, in a former video shop, took more than £140,000.
1995: Poundland's new 320,000 sq ft head office and distribution centre is opened in The Meadows, Cannock Road, Wolverhampton.
1996: The Hong Kong office opens to provide direct support with sourcing products from China and the Far East.
1999: Steve Smith wins UK Retail Entrepreneur of the Year award as Poundland grows to more than 50 stores and 2,500 employees.
2000: New Willenhall Customer Support Centre (CSC) and warehouse opened beside the Black Country Route to cope with growing store numbers. The new headquarters is built on the site of the former Wellman Smith & Owen factory where Steve Smith's father Keith once worked.
2002: Steve Smith and his father Keith sell Poundland to investment group Advent International for a reported £50 million; Colin Smith (ex Safeway CEO) joins as chairman. The group has 74 stores at this point.
2003: The 100th store opens in Shirley, West Midlands.
2004: Poundland finally opens its first store in Wolverhampton, in the Mander Centre. In 2012 it moved to the former TK Maxx unit in the Wulfrun Centre – it's biggest UK store at that stage.
2005: Springvale, a 300,000 sq ft second distribution centre at Bilston, is opened to cope with future growth.
2006: Jim McCarthy joins Poundland as CEO
2008: 200th store is opened in Doncaster, South Yorkshire.
2008: Poundland launches charity partnership with Macmillan.
2009: Poundland launched in Northern Ireland.
2010: Warburg Pincus acquires the majority shareholding in a £200 million deal, retaining Jim McCarthy and his management team. The 300th store in Cirencester opened.
2011: The first Dealz stores opens in the Republic of Ireland, at Blanchardstown and Portlaiose, and Poundland wins Discount Retailer of The Year at the Retail Industry Awards.
2012: Poundland opens temporary 200,000 sq ft distribution centre at Hoddesdon whilst permanent 350,000 sq ft distribution centre is built; and 400th store, in Haringey opened.
2012: Poundland chooses Cancer Research Wales as beneficiary from sales of its plastic carrier bags.
2013: The 25th Dealz store opens in Ireland and Poundland wins Discounter of The Year at The Grocer Gold Awards.
2013: First Celebrity partnership announcement – Jane Asher Bakeware range, Jane Asher's Kitchen.
2013: The 500th store is opened in Corporation Street, Birmingham, by Jane Asher, celebrity baker and author and boss Jim McCarthy.
2014: In March, Poundland floats on the London Stock Exchange. The shares are a bit more than £1 – they are currently around £3.16 each – valuing the business at more than £800 million.
2014: MP Esther McVey opens new 350,000 sq ft flagship distribution centre in Harlow.
2014: Poundland opens first Dealz store in Spain, in the resort of Torremolinos. Five more follow within a few months, three in Madrid.
2014: Poundland announces an exclusive jewellery range – Purple Ivy – and its Make Up Gallery.
2015: Poundland signs a conditional sale and purchase agreement to acquire 99p Stores for £55m.
2015: Second celebrity partnership announced – Tommy Walsh for a DIY range under the 'DIY:time' brand.
2015: Poundland exceeds £1 billion turnover for the first time.
The former boss of Sainsbury's convenience stores is one of the biggest cheerleaders for his company and the value he says it provides for its millions of shoppers every week.
He has led the business since 2006, steering it through the 200 stores mark, opening in southern Ireland and now in Spain, to the point where sales broke the £1 billion barrier last year at almost 600 stores in three countries. But the roots of the business could not be more humble.
It was the brainchild of father and son market traders Keith and Steve Smith, from Willenhall, who created the business with fellow former market trader Dave Dodd.
After the sale of the Smiths' highly successful Hooty's store in 1988 the family had planned to move to Spain. But Steve's wife Tracy had last-minute misgivings about moving.
Steve recalls that it was while sitting around a swimming pool in Spain, after breaking the news to his parents, that the Poundland was born.
"We were talking about what I should do when dad recalled how, when we ran the market stall in Bilston, the most successful idea was an 'everything for 10p each' box. He suggested starting a shop selling everything for £1, the old one-price idea that Woolworth's started with.
"I came back and set up the office in Sedgley with a second hand fax machine, a second hand desk and a dream of making the business worth £100m a year." That £30-a-week office was in Dudley Street, above the Concord Market, and is now occupied by accountants Bytheway.
"This was at the depth of the recession, remember. No-one wanted to know. Banks, property companies, they all thought the idea was mad."
But dad Keith had faith, and backed his son with £50,000.The first store opened in Burton-on-Trent on December 13, 1990. "It was a tremendous gamble," Steve said later. "If I'd missed the Christmas period I would have been sunk."
Steve continued to drive the business over the coming years, building up a chain of 50 stores and even building a new headquarters on the site of the Wellman, Smith & Owen factory where his father had started out as an apprentice draughtsman at the age of 16.
Keith had quit his apprenticeship just four months in because he thought he could earn more money on the market. "It turned out I was right," he said later.
As Steve built the business Keith enjoyed a well-earned retirement, buying a Jacobean manor in Shropshire where he opens the gardens to the public once a year and even has a small Poundland museum.
Some of the numerous awards received by the firm are proudly displayed there, including the coveted 1999 UK Retail Entrepreneur of the Year Award.
"That was down to Steve's hard work in running Poundland," Keith told the Express & Star last year. "As a father it makes me proud to see how well he has done. I came up with the idea, but Steve put everything into building up the company, so we picked up the odd award along the way. He even ended up paying me back the money I'd lent him to start up!"
Everything changed in 2002, when investment group Advent International bought out Steve and Keith for £50m. Steve has gone on to a string of new business ventures, most recently an online estate agency and has his own country house in Shropshire.
Poundland continued to grow, with time with Dave Dodd at the helm.
But six years later Advent decided to cash in their investment, making a very healthy profit when another investment group, Warburg Pinkus, paid them £200m.
Warburg wanted to bring in their own man to run the business and chose Jim McCarthy. It was a case of the right man at the right time.
Birmingham-born and highly competitive by nature, the son of a former regimental sergeant major, Burma veteran and later publican, Mr McCarthy had a long retail pedigree and a successful career that had seen him working closely with Wolverhampton retail millionaire Kevin Threlfall.
Mr Threlfall started out with a cigarette kiosk on Wolverhampton Market and built up the £1 billion Black Country-based T&S Stores group that was bought by Tesco in 2002 for £530m.
Along the way Mr Threlfall had acquired the Tipton-based Dillons chain of newsagents, where Mr McCarthy had been the group managing director. Mr McCarthy became retail director, and the duo turned T&S into a convenience giant with 1,200 stores before it was eventually snapped up by Tesco.
"I started out with Dillons as a 12 year-old paper boy in Birmingham," recalled Mr McCarthy in an interview with the Express & Star a few years ago. "I used to deliver papers with my young brother – I got him to run up and down the garden paths. I was in management, until he figured out he was only getting 20 per cent of the money and went off to get his own paper round."
After taking a year off following the T&S sale, Mr McCarthy was recruited by Sainsbury as managing director of its growing chain of Local convenience stores working under chief executive Justin King.
But, after just two years, a string of family tragedies led to a change of direction. "It was a great job, but I was up at 5.45am catching the train to London, getting back at 9.30pm or 10pm and working after dinner until the early hours – 1am or 1.30am.
"It meant my wife was having to deal with an awful lot – my mother-in-law died after a short illness, a nephew had a heart attack on the day of the funeral. For the first time in my career I took a decision that put my family first."
That involved leaving Sainsbury's to take on the job at Poundland, closer to home. Mr McCarthy added: "I was my own chief executive, I had more oxygen here – more freedom. I was very lucky; I found a fantastic business with a unique offer."
1. Britain's first Poundland was opened in 1990 at the Octagon Centre, Burton-upon-Trent.
2. 13,000 products were sold on the first day of trading – Burton customers were on to something good.
3. Poundland now has over 590 stores in the UK and the Republic of Ireland and it has started expansion into Europe with a trial of up to 10 'Dealz' stores targeted to open in Spain over a two year period.
4. Poundland has a long-term target of operating over 1,000 stores in the UK and has plans to open at least 60 stores each year.
5. Half the population now shop with Poundland. They serve more than 5.5 million customers each week.
6. Poundland is growing rapidly year on year with a 10.3 per cent increase in the amount of shoppers through their door from 2013/2014
7. The average Poundland shopper buys four or five items per visit.
8. Poundland stocks more than 3,500 products and 1,000 top brands.
9. Top sellers include – a 170g bar of milk chocolate Toblerone, two litres of semi-skimmed milk, a 120g box of Maltesers, 1.2kg of Whitworths white sugar, 10pk Finish tablets, Johnson & Johnson cotton buds and packets of 10+1 Kodak AA batteries.
10. Last year, Poundland sold 5.5 million boxes of Maltesers, 2.5 million umbrellas, 3 million lightbulbs, 18 million cans of Coke, 250,000 garden gnomes, 4.4 million bags of sugar and 3 million metres of tinsel
11. If you stacked every volumising mascara sold from Poundland's Make Up Gallery range end on end, it would reach 10,616 metres. That's 1,766 meters higher than Everest!
12. Poundland has sold a total of 41 million individual muffin cases since the Jane Asher bakeware range launch in 2014. It also sold 3.8 million metres of baking and greaseproof paper and 250,000 baking books.
13. The store was the first discount retailer to launch a celebrity range with an exclusive bakeware collection from baking entrepreneur, author and actress Jane Asher.
14. Poundland also teamed up with DIY expert Tommy Walsh this spring, creating a full DIY range priced at just £1 per item
15. Poundland has 14,000 staff colleagues. The longest serving colleague is Joanne Garratt, at the Corporation Street store in Birmingham, who started working at Poundland on May 13, 1991.
Within four years the number of shops had doubled, and Poundland kept on growing. A huge warehouse at Springvale, Bilston was followed by a third and then, in 2011, Poundland made the move into southern Ireland. That meant dealing in euros and coming up with a new name –Dealz.
Meanwhile the UK, and the rest of the world, had plunged into another recession after the credit crunch of 2007/8. Poundland, born in the recession of the early 1990s, had proved to be a successful business in good times. In tough times it turned out to be a phenomenon.
Middle-class shoppers suddenly started looking for value, trying to squeeze the best deal possible for their money.
German supermarkets Aldi and Lidl started their own growth surge while Poundland began seeing a dramatic change in the nature of its customers. The phrase 'flight to value' was used to describe the move by the middle classes to shop at discount stores.
Poundland can now boast that around half of UK shoppers use its stores ever year. As the pound coins keep rolling in, Poundland has kept on growing – adding around 60 stores a year.
At some stage the company says it will launch an online operation, but it is clearly in no hurry. It's high street shops are still doing well, with sales continuing to rise.
In the meantime its owners have taken the company onto the London Stock Exchange, where its shares are currently worth more than £3 each.
At the same time last year it opened the first of its stores in Spain, in Torremolinos, under the Dealz brand.
That has been followed by around half a dozen more, three in Madrid, and Poundland aims to have 10 open by next year. The success of the Spanish stores will lay the ground for Poundland's expansion elsewhere in Europe.
At the same time Poundland faces continual pressure to get the best value it can for its own money, which has seen it securing deals with big names like Toblerone, Cadbury's and Thorntons to offer specially packaged Poundland versions of their usual products.
The firm, which has become a go-to destination for fashionistas having launched own-brand make-up and costume jewellery ranges.
It has also seen the success of its first celebrity endorsement deal, producing a hugely successful range of baking goods with actress, celebrity baker and 60s icon Jane Asher.
That success has just resulted in the launch of a DIY range with Tommy Walsh, the TV builder who starred in BBC's popular Ground Force series.
As Poundland celebrates its first 25 years its momentum appears unstoppable. And that can only be good for shoppers.