Poundland to take clothing development back in-house following Pepco sale

Poundland has confirmed it will return to developing its clothing ranges in-house by early 2026, as part of a wider business reset following its sale to investment firm Gordon Brothers for £1 in June.

The retailer, which has sold apparel under the PEP&CO brand since 2016, currently sources the majority of its clothing through former owner Pepco Group’s pan-European supply chain. That model was adopted in 2023 after Poundland became part of the Poland-based group, which operates more than 5,000 Pepco stores across Europe.

However, following its sale, Poundland has entered into a transitional agreement with Pepco to maintain current clothing ranges through to early 2026. The arrangement is designed to ensure continuity while the retailer restructures to reintroduce a UK- and Ireland-specific model led by an in-house team.

"Those transitional arrangements are in place to give us time to return to our successful model of clothing developed by an in-house team," a Poundland spokesperson said. "We intend to return to that model after restructuring."

Clothing accounts for around 25-30% of Poundland’s overall sales, making it a key pillar of the wider business.

This comes as the chain prepares for a significant restructuring following its acquisition by Gordon Brothers. The deal, which transferred ownership of Poundland’s 800+ stores and 16,000 staff, is expected to lead to around 100 store closures and a series of rent negotiations with landlords, subject to court approval.

Pepco Group said the sale would allow it to refocus on its core Pepco business and improve profitability. In its third-quarter trading update, Pepco posted record-high revenue of €1.1 billion (£950 million), which was up by 7.7% year-on-year at constant currency.

As the business works through its restructuring, the return to an in-house clothing model is expected to offer Poundland greater flexibility and an opportunity to punctuate the UK value fashion market.