J&M Stores in Smith Street, St Peter Port, was previously known as Pound Magic, but it closed in January 2021 after the owners of the business did not renew the lease.
Michael Barnes, store manager at the time, said that he and his partner were offered the chance to take over the shop – but were warned that a pound shop could be unsustainable.
‘We were advised not to carry on with the name Pound Magic so we wouldn’t be obliged to sell everything for £1,’ he said.
But the new owners bought all the old Pound Magic stock, and so were able to carry on selling items at the bargain price.
However, changing conditions and rising inflation has made it impossible to continue in this way.
‘It’s very difficult at the moment because price rises in the UK are going way over our set profit margins. It’s got to the point now where stock availability to run a pound shop is nil,’ Mr Barnes said.
The business had come to an agreement with the landlord who had given it six months to get back on its feet. ‘He’s been absolutely brilliant,’ said Mr Barnes, who said his shop would continue to offer good value.
The pound shop reached its highpoint in about 2016, when there were an estimated 1,500 such stores across Britain, but numbers have fallen since and some pound chains have closed for good.
The store will continue to offer a range of goods, with a focus on cleaning products and toiletries, Mr Barnes said, and some 50% of items on sale will continue to be one pound. Pound Magic complained of ‘difficult trading conditions’ when it closed in January 2021 on the expiry of its previous lease. It also had a store in Jersey.