Specialist investor Gordon Brothers is said to have emerged as the frontrunner to be the next owner of Poundland.
The former Laura Ashley owner is among private equity firms circling the variety discounter, along with Modella Capital, which recently acquired WH Smith and The Original Factory Shop; Alteri Investments, which owns Bensons for Beds; Hovis owner Endless; and Lakeland owner Hilco.
It is thought Poundland could be sold for as little as £1, though the cheque required to return the retailer to growth would be much higher.
Analysts have predicted store closures are likely whoever takes control of the chain.
With bids expected to be made on Tuesday, Gordon Brothers is in pole position, according to The Times. However, other sources have told the paper Gordon Brothers does not have preferential status and other bidders may emerge.
Poundland: what’s gone wrong and what can it do to fix it?
Poundland owner Pepco Group confirmed in March it was “actively evaluating all strategic options to separate Poundland from [the] group… including a potential sale”. It followed three consecutive quarters of decline in like-for-like sales for the UK discount chain.
The weak performance led to a £650m writedown on Pepco Group’s balance sheet for the year to 30 September 2024, reflecting a hit to the value of its investment when it acquired Poundland in 2016. It drove a £560m net loss for the Warsaw-listed group.
Sales have suffered in a disastrous transition to source clothing and general merchandise at group level through Pepco, which left gaps in crucial ranges such as DIY. Industry insiders have criticised a decision to let the UK buying team go in the transition, leading to a loss of expertise in discount sourcing.
March also saw the official return of Barry Williams as Poundland MD. Williams was previously Poundland MD from 2017 to 2013, when he was parachuted in as MD of Pepco, Poundland’s sister retailer in Europe, to address underperformance.
Gordon Brothers were approached for comment.
A Pepco Group spokesperson said: “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 MD, 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.”
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