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Irish Times
4 hours ago
- Business
- Irish Times
Poundland sold for less than £1
UK discount retailer Poundland has been sold for less than £1 (€1.17) to Gordon Brothers, an investor that specialises in acquiring distressed assets, after a series of costly missteps by its Warsaw-listed parent. Pepco Group said it had sold the struggling retailer for a nominal consideration – or €1 (85p), according to a person familiar with the deal. Pepco also owns the Dealz chain of stores in the Republic. The company will support the business by rolling over an existing secured loan of £30mn and providing an overdraft of up to £30 million. The overdraft will become available upon completion of a proposed restructuring plan, which is expected to lead to the closure of some of Poundland's 825 stores and job losses. The chain employs 16,000 people. READ MORE Poundland has endured a disastrous spell of trading after Pepco's decision to replace its clothing and homeware ranges with the same products it sells in its business in continental Europe. The chain's sales fell by 6.5 per cent over the six months to March 31. The discounter was founded by Dave Dodd and Steven Smith in 1990 and became popular with shoppers for selling all of its items – spanning toothpaste, confectionery and laundry detergent – at a single price of £1. Will rent reform make building apartments viable? Listen | 40:12 However, it has struggled with competition from B & M, Home Bargains, Aldi and Lidl, as well as rising costs, which forced it to abandon its £1 price point. A rise in theft during the cost of living crisis also hit Poundland particularly hard. Wilko, another UK discounter, collapsed into administration in 2023. Poundland will continue to be led by Barry Williams, its current managing director. Gordon Brothers, the former owner of Laura Ashley, said it would provide up to £80mn 'to support the management team's proposed restructuring and turnaround plan'. It gave no details of Poundland's restructuring plan, which is subject to approval by England's High Court. Pepco Group, which also owns the Pepco and Dealz brands in Europe, said the sale of Poundland would allow it to focus on Pepco, its higher-margin clothing and general merchandise business. Poundland was a strong brand with about €2bn of annual sales, the company said. But it was also operating in an 'increasingly challenging UK retail landscape', and the challenges were 'only intensifying'. Pepco's shares have fallen from a peak of more than 56 zlotys (€12.30) in August 2021 to about 18 zlotys this year. – Copyright The Financial Times Limited 2025
Daily Record
19-05-2025
- Business
- Daily Record
Hundreds of Poundland stores at risk of closure as chain is set to be sold
The 825-strong chain has been up for sale since March. Hundreds of Poundland stores are at risk of closing as the retailer continues to look for a buyer. The move could potentially see thousands of jobs cut as a result. Earlier in March, we reported that the budget high street chain had been put up for sale, with advisory firm Teneo leading the process after its owners, the Pepco Group, confirmed it was examining 'all strategic options' for the firm. Reports now suggest that up to 200 loss-making stores have been identified as potential closures under the terms of any prospective deals, with The Times suggesting the firm could be sold for "effectively a pound". Poundland currently operates around 825 stores across the UK and Ireland, with over 160,000 employees said to be currently working for the chain. News of the potential closures come just as bids for the discounter are expected early this week, with an update from Pepco Group on its half-year results set to be unveiled this Thursday, May 22. Formed in 1990, Poundland opened its first pilot store in Burton Upon Trent by co-founders Dave Dodd and Steven Smith. Now a multi-million pound company, it sells everything from household essentials and groceries to clothing and homeware. While it initially sold prices at the advertised £1, products can now vary in price as the retailer struggles to battle rising costs and competition from other supermarkets and high street retailers. Some sources have reported that Gordon Brothers, former owners of Laura Ashley, have emerged as a frontrunner for investors. The potential list of buyers also includes Hilco Capital and Endless. Meanwhile, Modella Capital, the private equity firm that recently bought over WHSmith, is also said to be included on the list of potential investors. Join the Daily Record WhatsApp community! Get the latest news sent straight to your messages by joining our WhatsApp community today. You'll receive daily updates on breaking news as well as the top headlines across Scotland. No one will be able to see who is signed up and no one can send messages except the Daily Record team. All you have to do is click here if you're on mobile, select 'Join Community' and you're in! If you're on a desktop, simply scan the QR code above with your phone and click 'Join Community'. We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don't like our community, you can check out any time you like. To leave our community click on the name at the top of your screen and choose 'exit group'. If you're curious, you can read our Privacy Notice. It is worth noting that, as of writing, no decisions have been made regarding the sale of Poundland. News of Poundland's potential sale comes after the firm advised that it was struggling amidst a "challenging" UK retail landscape, with other contributing factors being changes announced in the Budget, including higher National Insurance contributions for employers and a rise in the minimum wage. To help address its struggling performance, former Poundland boss Barry Williams returned to the board at the start of 2025, less than two years after leaving the firm. Parent company Pepco is thought to have been "actively evaluating" all strategic options to separate the discounted firm from the business after it was found to be underperforming. A Pepco spokesperson told the Daily Record: "As announced at the Capital Markets Day on 6 March, Pepco Group is moving away from FMCG 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. "With Barry Williams' re-appointment 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."
