Future of bargain chain with 800 stores uncertain as owners explore ‘a potential sale’
THE future of Poundland has been left uncertain as its owner explores a "potential sale" of the business.
Polish company Pepco said it was exploring "all strategic options" to separate Poundland from its brand.
The group said it could make the major move to focus on its more profitable businesses in Europe.
It comes as Pepco said the upcoming hike to employer National Insurance Contributions (NICs) and national minimum wage would pile pressure on its costs.
From April, employer NICs will rise from 13.8% to 15% and the threshold at which they're paid will fall to £5,000 from £9,100.
The group also issued a warning over its annual earnings due to challenging trading conditions.
Read more on Retail
Pepco said: “Poundland is a strong brand that serves millions of customers every week and had around 2 billion euros (£1.67 billion) in annual turnover in financial year 2024, but it is also operating in an increasingly challenging UK retail landscape that is only intensifying.
“From April 2025, the UK Government’s additional tax changes announced in the budget will also add further pressure to Poundland’s cost base.
“Therefore, the board is actively evaluating all strategic options to separate Poundland from Group during financial year 2025, including a potential sale."
In the trading update to investors today, Pepco also said it would look at options to offload its Dealz business in Poland.
The group also said it was reviewing its Pepco chain in Germany.
Pepco said former Poundland managing director Barry Williams, who took over as managing director of Pepco in September 2023, will also return to his former role at Poundland ahead of a possible sale.
Stephan Borchert, chief executive of Pepco Group, said: “The board and I are actively exploring separation options for Poundland, including a potential sale, from the group, with consideration also given to the separation of the well-performing Dealz Poland over the medium term.
“Barry Williams did a great job as managing director of Pepco, returning it to like-for-like sales growth, and I am confident he will play a pivotal role in getting Poundland back on track, given his previous success there."
PEPCO STRUGGLES
The latest announcement from Pepco comes after the group reportedly brought in advisors to look at addressing issues at Poundland following a sales slump.
Consultants AlixPartners were drafted in earlier this year to look at options for a major restructuring of the retail chain.
This was said to include the potential for "significant store closures", as well as a sale of the business.
Another option reportedly being considered was a company voluntary agreement (CVA).
READ MORE SUN STORIES
A CVA allows firms to look at ways to save the business, such as reducing rent rates with landlords or closing stores.
Poundland's struggles come following a challenging backdrop for the