DISCOUNT chain Poundland has been sold for ‘just £1’ putting 100 shops at risk of closure.
The deal will put thousands of high street jobs at risk with the parent firm planning a major restructure.
1
Investment fund Gordon Brothers, the ex-owner of Laura Ashley, has agreed to buy the business for a “nominal fee”.
Sources close to the process have said this was £1.
It said it would go ahead with the proposed restructuring plans and turnaround of the struggling business.
Gordon Brothers has agreed to provide up to £80million in financing to Poundland.
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More details on what the restructuring plan will involve will be revealed “in due course”, Poundland said.
It’s understood that full details of the shake-up will be sent out to company creditors in the coming days.
Poundland is expected to close around 100 of its roughly 800 stores and ask for rent reductions from landlords as part of the process.
Pepco Group has owned the retail chain since 2016.
The retailer was put up for auction in March, with Homebase owner Hilco then reported among the bidders.
The Telegraph previously reported that up to 200 Poundland stores could face closure as part of a rescue sale.
Walkthrough Poundland’s first £1million store
It’s unclear what will happen to the 16,000 Poundland staff members.
However it’s been confirmed the business will continue to operate under the Poundland brand in the UK.
Poundland’s chief executive officer Barry Williams said: “Poundland is a UK and Ireland retailer of real significance, serving 20 million customers each year with a much-loved brand.
“Although recent trading has been challenging, we have built a turnaround plan with a simplified and more focused Poundland at its heart, as we aim to deliver the amazing value our customers expect.
“In due course we’ll share more details of the proposed restructure and turnaround plan. I’d like to thank Pepco for its stewardship of the business. We welcome Gordon Brothers and look forward to working with them as we implement our turnaround plan.”
IS THE INVESTMENT GIANT THE RIGHT FIRM FOR THE JOB?
By Laura McGuire, Consumer Reporter
Gordon Brothers is no stranger to the tricky world of retail.
The US based investment group bought Laura Ashley out of administration after it became one of the first business casualties of the Covid-19 pandemic.
And while it sold the textile business at the start of the year, the firm helped the British homeware brand return to the high street through a partnership with retail powerhouse Next.
The business also supported Toys ‘R’ Us during its administration, closing 25 stores.
If successful in its purchase of Poundland, there is no doubt that challenges lay ahead.
Rising costs, coupled with shoppers tightening their purse strings, have placed pressure on businesses and damaged sales.
Competition in the discount space is rife, with many shoppers continuing to favour B&M and Home Bargains when hitting the high street.
It will also have to tackle the rising theft problem hitting UK retailers, with hundreds of Poundland employees now wearing bodycams to help catch criminals.
Stephan Borchert, Pepco Group chief executive, said: “This transaction will strongly support our accelerated value creation programme by simplifying the group and focusing on our successful Pepco business.”
Pepco had said it was looking to offload the brand amid a wider shift away from food and drinks.
It has said previously a deal was expected before the end of its financial year in September.
Pepco reported weak Poundland sales over the past six months, cutting the brand’s trading guidance for the year as a result.
Stephan Borchert, chief executive of Pepco, said: “At Poundland, trading remains challenging, which is reflected in a profit outturn below expectations for H1 and a weaker outlook for the full year.
“Barry Williams, who was reappointed as Poundland managing director in March 2025, and his team are actively driving a recovery plan to help turn around the business by refocusing on its traditional core strengths.”
Poundland revenues dropped by 6.5% to £830million for the six months to March compared with a year earlier.
The brand suffered “challenges across all categories” and had 18 net store closures over the period.
Pepco said “highly challenging trading conditions” were behind its fall in sales.
Poundland is now due to deliver earnings of between €0 and €20million (£16.9million) compared with previous guidance of €50million and €70million.
The wider Poland-based Pepco Group saw total revenues grow by 4.3% to €3.34billion (£2.82billion) for the half-year.
However, like-for-like sales were marginally lower as growth in its Pepco brand was offset by the struggling Poundland operation.
Poundland store closures
The discount chain is set to close four branches later this month.
Surrey Quays will be the first to close on June 11.
The following day, the Barrow in Furness store will shut for good.
Poundland’s Bristol branch will shut its doors on June 20 while the Flint store will be gone on June 21.
Eight stores have closed since the start of May, and a further 12 have shut since March 2024.
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This is the full list of stores that have closed, or are set to close in the coming months:
- Connswater Shopping Centre, Belfast – closed March 2024
- Macclesfield – closed August, 2024
- Maidenhead – closed October, 2024
- Sutton Coldfield – closed October, 2024
- Clapham Junction Station, London – closed May 2
- Belle Vale Shopping Centre, Liverpool – closed May 6
- St George’s Centre, Gravesend – closed May 8
- Southwark Park Road – closed May 14
- Copdock Mill Interchange, Ipswich – closed May 20
- Brackla, Wales – closed May 24
- Chiswick High Road – closed May 28
- Filton Abbeywood – closed May 31
- Surrey Quays – closing June 11
- Barrow Dalton Road – closing June 12
- Union Gate, Bristol – closing June 20
- Flint – closing June 21
- Cowes, Isle of Wight – closing July (exact date tbc)
- Newquay, August 1
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