Poundland owner attempts to recover brand appointing advisors
After reporting slipping sales earlier this month, Poundland owner Pepco Group has appointed advisors to explore radical options to recover the brand.
Last week, Pepco said it was continuing a "comprehensive assessment" of Poundland to recover trading and get the business back to its core strengths, including a thorough assessment of all costs across the business, as well as evaluating its overall competitive positioning.
Alix Partners, the Warsaw-listed company, is set to explore radical options for the British chain, according to Sky News.
Sources said this weekend that the sales crisis would prompt Poundland’s owner to embark on. The restructuring process could lead to significant store closures or even an attempt to sell the business.
According to these sources, no decisions had been taken on a sale of the retailer and the immediate focus is on improving its cash performance and reviving the chain's product offering.
Last week, Pepco Group reported a challenging trading environment at Poundland during the first quarter ending 31 December 2024, largely driven by weak clothing and general merchandise performance and tough market conditions.
The company delivered revenues of £1.6 billion (€1.9 billion), down 1.1% on a like-for-like basis, with a positive performance at Pepco and Dealz offset by continued challenges at Poundland.
Poundland like-for-like revenues declined 7.3%. The value retailer also reported a net closure of 11 Poundland stores, primarily reflecting lease expirations on larger stores. It will not open any net new stores during the remaining quarters.
Stephan Borchert, CEO at Pepco Group, said: "The group delivered a mixed performance in its first quarter, with a strong performance from both the Pepco and Dealz brands, partially offset by Poundland’s ongoing challenges.
"Getting Poundland back on track is a key priority - we are undertaking a comprehensive assessment of the business and taking immediate measures on improving our cash performance and strengthening the customer proposition."
The trading update comes as Poundland invests more money than ever into new security measures to tackle retail crime after losing more than £40 million worth of stock last year. The value retailer, which sells a large proportion of its products for £1 or less, said it had been a particular target of theft and abuse.
