Update on the future of Poundland as 200 stores face closure as three shut in days
THE owners of Poundland have issued an update on the future of the troubled discount store.
Polish retail giant Pepco said it expects the sale of Poundland to complete by September.
Bosses at the firm told investors the board "continues to actively explore separation options for Poundland business with an exit expected by end of FY25."
This would be at the end of the group's current financial year, which is due to close in September.
The brand also said it suffered “challenges across all categories” and had 18 net store closures over the period.
Poundland revenues dropped by 6.5% to 985 million euros (£830 million) for the six months to March, compared with a year earlier.
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It comes after it was reported that up to 200 stores could close as part of Poundland's rescue deal.
Gordon Brothers, the ex-owner of Laura Ashley, has become the frontrunner to takeover the bargain chain, which recently announced a wave of store closures across the UK.
Turnaround Investors were linked with a bid for Poundland.
These firms specialise in buying up struggling businesses in the hopes of turning them around.
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Bidding for the business was expected to start this Tuesday.
A source told The Sunday Times that Poundland would be priced at "effectively a pound."
Several interested parties are reportedly looking at bidding on the UK budget retailer.
Further store closures and job losses would come as a blow to the high street.
Poundland already has plans to shut up to three stores over the coming weeks, with a total of 10 sites planned to shut since the start of the year.
At the end of the month, the retailer's branch on Chiswick High Road will also shut for good.
This month, stores across Gravesend’s St George’s Centre, Clapham Junction station in London, and Liverpool’s Belle Vale Shopping Centre all pulled down their shutters for the final time.
This comes on top of a closure in Brackla Wales which is due to take place on May 24.
A few months back, Poundland was forced to close a branch in Belfast after the Connswater Shopping Centre was put into receivership.
You can see the full list of closures below:
- Chiswick High Road – closing May 28
- Copdock Mill Interchange Ipswich, closed May 20.
- St George’s Centre, Gravesend – closed last week
- Clapham Junction Station, London – closed May 2
- Belle Vale Shopping Centre, Liverpool – closed May 6
- Brackla, Wales – closing May 24
- Connswater Shopping Centre, Belfast – closed end of March
- Maidenhead – closed October 2024
- Sutton Coldfield – closed early October 2024
- Macclesfield – closed August 2024
WHAT IS GOING ON AT POUNDLAND
Last month, its parent company Pepco is said to have hired advisory firm Teneo to oversee the sale of the UK business.
It comes after Pepco said it was looking at "all strategic options" to separate Poundland from its brand.
The Polish group said it might turn its focus to its more profitable businesses in Europe.
Pepco previously warned that upcoming hikes to employer National Insurance Contributions (NICs) and national minimum wage would significantly add to its costs.
Late last year, it was revealed that profits at Poundland also tumbled by £641million in the year to September, with bosses again blaming slow sales amid a poor outlook thanks to measures set out by Reeves.
A spokesperson also said the huge loss was "due to a non-cash impairment at Poundland that relates to the acquisition of the UK chain in 2016".
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Late last year, it was revealed that profits at Poundland also tumbled by £641million in the year to September, with bosses again blaming slow sales amid a poor outlook thanks to measures set out by Reeves.
A spokesperson also said the huge loss was "due to a non-cash impairment at Poundland that relates to the acquisition of the UK chain in 2016".
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.