HE FAMOUSLY pocketed £50million in 2001 when he sold his share of the Poundland retail empire he founded 11 years earlier.
So who could blame Steve Smith for splashing some cash? His vast 13-bedroom Shropshire home is predictably lavish and boasts a pub, a snooker room and an indoor swimming pool. There’s a huge oak-panelled living room, a dining table with enough seating for a couple of football teams plus a grand hallway with giant chandeliers and a galleried staircase. On the driveway in front of the crescent-shaped house you can’t miss Steve’s sunshine yellow Lamborghini convertible, which would set you back more than £200,000 brand new.
When the weather’s too dreary in Shropshire to drive about with the roof down Steve, 51, and his wife Tracy, 50, simply hop on a plane to Florida. There they own a detached villa with six bedrooms, five bathrooms and a private pool.
Yet all this luxury is not quite as frivolous as it seems.
For despite having riches most of us can only dream of Steve is a man who can’t shake the love of a bargain that has been coursing through his veins since he was a young boy growing up in Birmingham. “I never buy a car that’s newer than 18 months old because you lose money as soon as you drive out of the showroom and that’s a waste,” Steve tells me. “So I go for second-hand cars with low mileage and save thousands in the process. That includes my Lamborghini.
“It’s the same with our house. About 10 years ago we bought a plot of land and had it built. I sourced all the building materials myself and in doing so we saved about 25 per cent on what it would have cost to buy an equivalent size home in the same area. It took us just over two years to build.”
If further proof were needed of Steve’s money-saving acumen his palatial Florida villa is it. “It’s a beautiful place but I only paid £100,000 for it two years ago,” Steve laughs.
I’m incredulous. How on earth did he get it so cheap? “Negotiation,” he continues. “My bank told me they had some repossession properties they needed to sell and the villa was one of them. I like to bargain and whether I’m buying something for myself or to sell to customers I want value for money. That’s the way I was brought up.
“So I bartered them down to £100,000. It would have cost more than £300,000 if we’d bought the same spec villa through an estate agent.
“I’m a sucker for saving money and with the internet it’s never been so easy to find out what you should be paying for something and what’s over the odds, or how to grab a bargain.”
This leads us neatly on to Steve’s latest venture – a website called poundshop.com, the online version of a high-street pound shop and the first of its kind.
Within minutes of its launch last Tuesday afternoon the website crashed temporarily after receiving more than 5,000 hits per minute.
“It’s the same treasure-hunt-type experience as going into a store like Poundland,” Steve explains. “You never know what you’re going to find and the aim is to add 100 new items each day so our customers can always find something new.”
He’s selling everything from nappies and baby wipes to batteries, lightbulbs and cleaning products. Dog food has apparently been one of the biggest sellers this week.
“People can buy heavy items such as tins in bulk online because their shopping’s delivered to their door so they don’t have to worry about carrying it,” Steve continues.
The minimum spend on pound-shop.com is £10 and there’s a nominal delivery charge which he tells me he is still working to reduce further.
Steve’s inspiration has always been his hard-working dad Keith who ran a market stall in Birmingham before eventually setting up the family cash and carry business, Hooty’s Supplies. When he sold it more than 20 years ago he and Steve’s mum retired to Mallorca.
With a £250,000 loan from his dad Steve and another former employee of Hooty’s, Dave Dodd, launched Poundland. They opened their first store in Burton upon Trent on December 13, 1990, selling everything from Cadbury’s chocolate and Walker’s crisps to knickers, golf clubs and garden gnomes for, you’ve guessed it, £1. In the first day alone they shifted £13,000 worth of stock.
Single-price retailing was already huge in the USA but Steve was the first to introduce it to the UK. Within two years he’d repaid the loan to his dad and by the time he sold his share in 2001 the chain had 70 stores.
“When I launched Poundland it was always going to be tough to make it pay because of the tight margins when we were selling everything for £1,” Steve continues. “It was only when we opened our 15th store about 18 months after the launch and were turning over about £5million a year that we started making any money at all.
“Getting a shop at the Meadowhall shopping centre near Sheffield was a big turning point. Landlords used to tell us that they didn’t want Poundland in their centres because they saw it as downmarket. But the guy who owned Meadowhall at the time said he loved our concept and that as soon as a shop became available we could have it.
“He kept his promise and in 1991 we took over what had been a video shop and took more than £140,000 in that store in the first week.
“We sourced the world for products and had an office in Hong Kong. We used to source quickly, pay quickly and get stock on the shelves for our customers.
“We also created a lot of products ourselves, such as perfumed bin liners after customers kept telling us they needed a solution to their bins smelling.”
Steve errs and ums for several minutes when I ask him what he splashed out on when Poundland first started making money. “I think it was an expensive watch that Tracy bought me for my 40th birthday,” he says. “We also started buying experiences such as first-class flights, which we’d never had before. I’ve since bought myself a keyboard which I play at home to relax.”
He has a daughter aged 26 and two sons aged 18 and 16. The older two work for Steve while the youngest is at college.
“They know the value of money,” says Steve. “We didn’t want them growing up spoilt so encouraged them to have part-time jobs in the business while they were at school.”
There used to be a bit of a stigma about pound shops but statistics reveal that one in five customers is middle-class.
Now, with the anonymity of being able to order bargain basement products online rather than risk being spotted nipping into a store, poundshop.com is set to attract more of middle Britain.
“We’re starting off selling essentials on poundshop.com such as cleaning products and toiletries but eventually we want to sell stuff that you can’t buy in the shops,” says Steve. “Imagine being able to buy bespoke party plates and cups for a pound with your child’s name printed on them.”
In the meantime he’s busy making more money from various other business ventures plus property deals – he’s just done a deal on some houses in Morocco.
“I bought them off plan for a bargain price so we can cash in,” Steve laughs, ever the savvy shopper.
“It’s all about making and saving money. That’s the way I’m built. I might have a fortune but I’m protective of it. It’s much more difficult to make money than it is to spend it. I’m not going to waste it by paying market prices when there are always ways to reduce costs, whether you’re buying essentials or luxuries.”
Via Sunday Express