1. Santander already had a relationship with value retailer Poundworld, but realised the company
had significant potential for growth and took steps to help them not only expand, but also
relieve cashflow.
Santander had a relationship with Yorkshire-based value retailer
Poundworld, providing cash-handling services to a small number
of the business’ shops. Two years ago this relationship took a new
turn. “Poundworld had relationships with other banks,” explains Paul
Watkin, Relationship Director, Large Corporate Group, at Santander
UK. “But I felt there was an opportunity for us to spend some time with
management and see if we could help with their financing needs.”
“Through speaking with Chris (CEO) we found Poundworld’s banking
facilities didn’t mirror the cashflow of the business, the international
profile of its purchasing and working capital cycle, or the needs of
a rapidly growing £340 million turnover business. We felt that the
company would benefit from more certainty with its funding, and
thought that the ideal solution would be to replace the historic
overdraft arrangements with committed facilities.”
Maintaining success
As a successful chain, Poundworld keeps costs low by importing
the majority of its stock from abroad. After paying for goods, the
business has to endure long periods during which those goods
are packed, shipped and stored before being imported to outlets
for sale. “We had to build a solution around that timeframe,” adds
Mark Lonsdale, Regional Director for Trade Finance at Santander.
“Historically, Poundworld’s facilities had been structured around
a 90-day trade cycle, which did not fully reflect the actual working
capital cycle of about 135 days.”
As an established business with between 30 and 40 new outlets
opening every year, Poundworld required a sophisticated package
of tailored support. Cue 18 months of discussions that culminated
in the facilities being made available in March this year.
CASE STUDY
RELATIONSHIP BANKING ENABLES
SUCCESSFUL RETAILER TO REACH
EVEN GREATER HEIGHTS
What I liked about Santander
was they put faces behind the
names. Everybody got to know
everybody and it really worked.
They did their homework.
Chris Edwards, CEO, Poundworld
“Knowing that we are committed to
supporting his business over the long-term,
Chris (CEO) is now free to focus on strategic
planning and growth.”
Paul Watkin, Relationship Director,
Large Corporate Group, Santander
SimplePersonalFair
Whatabankshouldbe

2. Providing the best
“We were looking at a few banking options, but we got a strong
impression that Santander wanted to do their best for us,” says
Poundworld CEO Chris Edwards. “We soon realised that this was the
bank for us and we have been more than happy with that decision.”
He adds, “With every meeting we gained more and more confidence
in them. To get to the point of the offer, they had to calculate all the
different financial aspects of the business, from trade loans to foreign
exchange to credit cards.”
“What I liked about Santander was they put faces behind the names.
Everybody got to know everybody and it really worked. They did their
homework properly, so when they made us an offer it was obviously
the best.”
The package
That package supports both Poundworld’s current requirements
and future growth. Santander’s facilities included a £5 million
committed credit facility; a $30 million trade import loan; a group-
wide overdraft; and facilities to accommodate foreign exchange
requirements; in addition to the Day-to-Day banking facilities for
the shops and head office.
“All businesses have specific and different needs,” says Paul Watkin.
“So we got to know Poundworld, their industry and how the two
connect. Given the scale of this business, Santander’s approach is
to create a deal team. This includes not only the Relationship team
and our International colleagues but also, importantly, a Credit
Partner. This way, ideas are considered well ahead of our final credit
approval stage.”
Santander’s approach has delivered immediate bottom-line benefits to
Poundworld. The credit facility committed for three years, for example,
gives Poundworld’s suppliers extra confidence in the business and is
helping to bring down the premiums it pays to trade insurers, landlords
and suppliers. “When you’re talking about a business like this operating
on fine margins, a 0.5% or 1% difference is significant on £340 million of
turnover,” Mark says.
“The relationship with Santander has made it a lot
easier to grow... it’s great to be free to do the job.”
Chris Edwards, CEO, Poundworld
Seeing the light
The new banking arrangements have led to savings in other areas too.
Poundworld’s managers now have an opportunity to take a step back
to review the business’ operations in a bid to find new centres of profit
and cost-reduction. This new approach has resulted in a lighting refit
that will save the business millions of pounds over time.
“We can now concentrate on the business instead of worrying about
money-admin problems,” says Chris. “The relationship with Santander
has made it a lot easier to grow. For example, we took the decision
to install 76,000 six-foot LED tubes in our shops. The total cost was
approaching £1.8 million and we get a return on that investment in
about 18 months because of the energy savings. When you’re actually
running the business you have time to plan these things; it’s great to
be free to do the job.”
Company turnover: £340 million
Sector: Retail
Over 5,000 employees
Poundworld is a large, successful and growing chain of full-line
discount stores located across the UK.
The company’s existing finance package wasn’t fully able to
accommodate both Poundworld’s growth and its trade cycle,
which in turn put pressure on working capital and cashflow.
Santander took the time to understand the company and its
aspirations and delivered a tailored solution that properly
reflected the complexity, scale and potential of Poundworld’s
operations.
Through Santander’s personal approach to banking, the team
took a significant amount of time to understand and evaluate
what the business needed and what facilities would allow it
to grow.
As well as delivering significant cost and operational savings,
Santander’s support has provided a firm financial footing to
enable management to focus on strategy and growth.
Santander’s relationship approach, tailored solutions and three-
year committed facilities are helping the company to negotiate
better contracts and establish new growth channels.
In brief
Solutions delivered:
Day-to-Day Banking
Store cash collection
Financing: Committed Loan, Trade Import Loan, Asset Finance
International Banking Services
All lending is subject to status.
Santander Corporate Commercial is a brand name of Santander UK plc, Abbey National Treasury Services plc (which also uses the brand name Santander Global Banking and Markets) and Santander Asset Finance plc, all (with the exception
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