Poundland, one of Britain’s best-known discount retailers, has been sold for a nominal sum of £1 as part of a last-ditch rescue deal that could see up to 200 of its 800 stores shuttered and thousands of jobs put at risk.
The ailing chain, which employs around 16,000 staff across the UK and Ireland, was offloaded by its parent company, Pepco Group, to retail turnaround specialists Gordon Brothers. As part of the deal, Poundland will receive an £80 million cash injection to support a major restructuring programme aimed at reversing its recent financial decline.
The discount giant has suffered a series of setbacks in recent years, from surging operating costs and declining footfall to what it described as a “shoplifting epidemic” that cost the business £40 million in stolen goods last year alone. Revenue dropped by 6.5% in the first half of this year to €985 million (£830 million), and 18 stores closed during the period.
While the company insists the Poundland and Dealz brands will continue to operate in the UK, Isle of Man and the Republic of Ireland, it confirmed that a significant restructuring process is underway, with full details to be revealed in the coming weeks. Industry insiders estimate that as many as 200 stores could be closed as part of the plan, and warned that around £100 million may be required to fully stabilise the business.
Poundland’s chief executive, Barry Williams – who returned to the top job earlier this year – will remain in place. He acknowledged the “challenging” trading environment but said the business remains one of “real significance,” serving 20 million customers annually. He pledged to deliver a “simplified and more focused” Poundland that continues to offer “amazing value”.
The deal marks a dramatic fall from grace for the retailer, which just eight years ago abandoned its all-items-for-£1 pledge in favour of a multi-price model. Items now range from 50p to £5 – a shift which, coupled with cost-of-living pressures, has seen customers turn to rivals such as B&M and Home Bargains.
Gordon Brothers, which previously owned the collapsed fashion retailer Laura Ashley, beat out competition from Hilco Capital for the takeover. The investment firm now faces the challenge of revitalising the brand and restoring consumer confidence.
Pepco, which has retained a minority stake, said the sale will allow it to refocus on its core European operations, particularly its higher-margin Pepco clothing and general merchandise brand. Chief executive Stephan Borchert said the disposal of Poundland aligns with the group’s strategic shift away from food and fast-moving consumer goods (FMCG) and would support its “accelerated value creation programme”.
The sale, though symbolic at £1, reflects broader difficulties across the UK’s retail sector, with high inflation, rent pressures and consumer spending squeezes continuing to weigh on operators. Analysts said that while the Gordon Brothers’ backing gives Poundland a fighting chance, the size of the store estate and scale of the turnaround required remains significant.
The Unite union and retail workers’ groups have called for urgent clarity on store closures and job security as negotiations continue behind the scenes.
Gordon Brothers and Poundland are expected to set out detailed restructuring proposals within the next few weeks.
Read more:
Poundland sold for just £1 as up to 200 stores face closure amid major restructuring