Pepco Group say Poundland have been sold to Gordon Brothers for the nominal sum of £1.
Gordon Brothers is a global investment firm which formerly owned fashion label Laura Ashley. It says it will invest up to £80m in Poundland to help turn the business around.
As part of the transaction, Gordon Brothers, Pepco Group and Poundland have agreed to put forward a restructuring plan which is likely to look at store closures and reducing the company’s rent bill – details of this to be announced “in due course” Pepco have said.
Pepco has previously said that it’s struggling Poundland stores were “operating in an increasingly challenging UK retail landscape that is only intensifying”. It warned that increased employer National Insurance contributions which kicked in in April have added pressure on the chain.
Poundland has been struggling to compete with other discounters, with sales down in January and February this year.
Poundland started in Burton-on-Trent in 1990 and has since grown to over 800 stores across the UK and Ireland, employing around 16,000 people.
Locally, it has stores in Haverfordwest and Tenby in Pembrokeshire; Carmarthen, Ammanford and Llanelli in Carmarthenshire; Fforestfach, Morfa and the city centre in Swansea; Neath and Aberavon in Neath Port Talbot; and Maesteg, Porthcawl and Bridgend in Bridgend County.
Pepco branded shops opened in Poland in 2004, expanding into Czechia and Slovakia in 2013 with further expansion into Croatia, Hungary, Lithuania, Romania and Slovenia between 2015 and 2017. Additional stores opened in Latvia, Estonia, Bulgaria, Italy, Serbia, Spain, Austria and Germany from 2018.
Pepco Group was formed following the company’s acquisition of Poundland in 2015 and is listed on the Warsaw Stock Exchange.
Pepco say that as part of the sale all stores, colleagues, assets and liabilities of the Poundland business will move under Gordon Brothers’ ownership as part of the transaction.
Pepco Group expects to obtain a minority investment interest in Poundland, subject to the proposed restructuring of Poundland being sanctioned by the High Court in England.
Under this new ownership, the business will be led by Barry Williams, currently Managing Director of Poundland. The business will continue to operate under the Poundland brand in the United Kingdom and under the Dealz brand in the Isle of Man and Republic of Ireland
Stephan Borchert, Pepco Group CEO commented: “The agreed sale of Poundland marks an important milestone in our strategic plan to… focus predominantly on Pepco, our higher margin clothing and general merchandise business.
“This transaction will strongly support our accelerated value creation programme by simplifying the Group and focusing on our successful Pepco business. I am confident that Pepco has the right foundations to be one of Europe’s most successful discount retailers, delivering customer satisfaction, profitable growth and shareholder value.
“Poundland remains a key player in UK discount retail, with millions of customers annually and a well-loved brand and proposition. We want to sincerely thank all the Poundland team for their ongoing commitment and contribution to the Group and wish Barry Williams and his team all the best for the future.”
