Bargain chain with 800 stores set to be sold as high street shops at risk
A BARGAIN chain with over 800 stores is set to be sold, reportedly placing high street shops at risk.
Poundland has hired advisory firm Teneo to oversee the sale of popular discount chain, according to The Telegraph.
Sources close to the outlet claim loads of Poundland stores could be axed as part of the proposed sale.
A Pepco spokesman, which is the parent group of Poundland, told the outlet: “As stated at our capital markets day on March 6, we are actively exploring separation options, including a potential sale, for the Poundland business.
"We have started to work with advisers to support us with this process.”
It comes after its Polish company Pepco said it was looking at "all strategic options" to separate Poundland from its brand.
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The group said it might turn its focus to its more profitable businesses in Europe.
Pepco previously warned that upcoming hikes to employer National Insurance Contributions (NICs) and national minimum wage would significantly add to its costs.
Chancellor Rachel Reeves said during her autumn statement she would raise employers' National Insurance contributions (NICs) from 13.8% to 15%.
She also announced a reduction to the threshold at which businesses start paying NI contributions from £9,100 to £5,000.
It's estimated that the move will raise £25billion - the equivalent of around £800 per employee for each firm.
Late last year it was revealed that profits at the firm also tumbled by £641million in the year to September, with bosses again blaming slow sales amid a poor outlook thanks to measures set out by Reeves.
A spokesperson also said the huge loss was "due to a non-cash impairment at Poundland that relates to the acquisition of the UK chain in 2016".
This means the value of the business has decreased because of an expectation future cash flow will fall.
More recently, Poundland also saw revenue fall by 9.3% for the three months to December.
The firm is not the first business to warn of challenges because of Rachel Reeve's Autumn Statement.
The move has been blasted by a number of high street stores, including Gregg's, Sainsbury's and Next and Halfords who said the move could force them to raise prices and further bruise the industry.