Pepco Group could put Poundland up for sale
Poundland’s owner, Pepco Group, which also operates Dealz and Pepco, is exploring the sale of Poundland as part of a broader strategic shift.
In its Capital Markets investor presentation, the group outlined how its ultimate ambition is to operate under a single Pepco format, oriented around its higher margin Pepco clothing and general merchandise ranges. As a result, Pepco Group is looking to move away from FMCG and is evaluating all options to separate Poundland from the group in FY25, including a potential sale.
Subscribe to TRBThe group said Poundland is operating in an increasingly challenging UK retail market and highlighted how higher wage costs following the tax changes announced by the government in October’s Budget will add further pressure to Poundland’s cost base.
In January, Pepco Group reported a 7.3% decline in first quarter like-for-like revenue at Poundland, driven by weak clothing and general merchandise performance and ongoing challenging market conditions.
The group has also announced that Barry Williams, former Poundland managing director, who took over as managing director of Pepco in September 2023, has returned to Poundland in the position of managing director.
Stephan Borchert, chief executive of Pepco Group, said: “We are taking clear strategic action to focus on the Pepco brand as our single future format, to move away from FMCG and create a simpler business focused on higher margin clothing and general merchandise.
“Pepco will continue to be the engine of the group’s earnings potential, and its strong customer offer and price leadership give it a compelling ‘white space’ opportunity to drive further profitable growth in its Central and Eastern European heartland, as well as select markets in Western Europe.
“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.”
