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Poundland, the UK discount retailer known for its budget-friendly prices, is about to be sold for a symbolic £1 as its parent company, Pepco, looks to offload the struggling chain.
Gordon Brothers, a US-based turnaround investor and former owner of Laura Ashley, is the frontrunner among the bidders, though sources warn that Modella Capital, Alteri, Hilco Capital, and Endless are also in the running. Bids for the retailer, which operates 825 UK stores and employs over 18,000, are due Tuesday.
Pepco, which took over Poundland in 2016, put it up for sale in March to focus on its Pepco and Dealz brands, the latter being Poundland’s presence in Spain. The decision to sell comes after a £675 million impairment and a 7.3 per cent sales drop in the final quarter of 2024. This has been mostly blamed on the UK high-street retail environment going through its worst patch in years, with Rachel Reeves, the UK Chancellor of the Exchequer, hiking National Insurance. Despite £1.6 billion in sales in 2024, Poundland has not done as well as its rivals like B&M, in part, due to an unsuccessful clothing branch and already high debt to Pepco.
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The sale, which is being managed by Teneo, is likely to lead to store closures, particularly larger ones, including former Wilko locations. Pepco hopes to give some oomph to £1 products to bring back the customers. The symbolic sale price shows the kind of turnaround which is needed, with Gordon Brothers odds on to lead the effort, although the final buyer remains uncertain.
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