Poundland sale puts jobs at risk as 200 stores may close

Times

a day ago

Up to 200 stores and thousands of jobs are at risk as part of the sale of Poundland, the struggling discount retailer.
The latest bids for Poundland are expected early this week before an update on the process from Pepco Group, its Poland-listed owner, at its half-year results on Thursday.
Pepco, which formally put Poundland up for sale in March, is seeking to finalise the sale, being run by advisers at Teneo, by the time of its full-year results at the end of September.
Bidders for the retailer have identified as many as 200 loss-making stores that could be offloaded as part of a deal, The Sunday Telegraph reported.
Poundland, which has operated in Britain since 1990, employs about 16,000 people and has 825 shops.
It has struggled with competition from the big supermarket chains, increased costs and its clothing offering. In 2017 it shifted away from selling everything for a pound to selling products at different prices, typically between 50p and about £5.
Interested prospective buyers are understood to include Gordon Brothers, Hilco Capital, Modella Capital and Endless.
A spokesman for Pepco Group said: 'As announced at the capital markets day on March 6, Pepco Group is moving away from fast-moving consumer goods to create a simpler business focused on higher-margin clothing and general merchandise and is actively exploring separation options for Poundland, including a potential sale, from the group.'
He added: 'With Barry Williams' reappointment as managing director, Poundland is executing a turnaround programme to get the business back on track, focusing on its core heritage strengths and a simpler pricing proposition and customer offer.'
The management said in March that Poundland had been a 'drag on the group's financial performance, with lower revenue growth, lower gross margins, higher costs to operate and, consequently, lower profitability and returns on invested capital compared with Pepco'.
It had also said that despite Poundland generating about €2 billion in revenue in 2024 it was 'operating in an increasingly challenging UK retail landscape that is only intensifying' and that the extra costs from the government's budget would 'add further pressure to Poundland's cost base'.
Additional cash and a debt refinancing are expected after a sale.
Pepco Group is also considering the separation of its Dealz Poland brand to focus on its Pepco brand, which operates in eastern and central Europe and has about 3,845 stores.