Poundland’s future hangs in the balance as its owner, Pepco Group, explores a possible sale of the UK discount retail chain amid rising costs and weak sales performance.
The Poland-based retail group announced that it is considering “all strategic options” for the struggling 825-store chain, as it shifts focus to its more profitable Pepco brand.
Pepco stated that Poundland generated around €2bn in revenue in 2024, but emphasized that trading conditions in the UK retail sector have become increasingly challenging. The company also warned that upcoming wage and tax changes announced in October’s budget will add further pressure to Poundland’s operational costs from April 2025.
Why Poundland Could Be Sold
Pepco, which operates across Europe, has confirmed that it wants to streamline its operations and build a single pan-European retail format centered around its Pepco stores. As part of this strategy, the group is also reviewing its Dealz brand in Poland and assessing its Pepco business in Germany.
In a statement, Pepco said:
“Poundland is a strong brand that serves millions of customers weekly, but it is also operating in an increasingly challenging UK retail landscape. Therefore, the board is actively evaluating all strategic options to separate Poundland from the group during financial year 2025, including a potential sale.”
Impact of Budget Changes and Rising Costs
The UK government’s planned national insurance increases and a higher minimum wage from April 2025 will significantly impact retailers like Poundland, which operate on tight margins. Pepco lowered its earnings forecast for Poundland, predicting underlying earnings of between €50m and €70m (£41.9m-£58.6m) as sales remained negative in January and February.
Former Poundland Boss Returns to Oversee Restructuring
To stabilize Poundland ahead of a potential sale, Pepco has appointed Barry Williams—its former managing director—to return to his previous role. Williams, who successfully led Poundland in the past, was serving as managing director of Pepco since September 2023.
Stephan Borchert, Pepco Group’s CEO, confirmed that Williams will oversee the restructuring process:
“Barry Williams did a great job at Pepco, returning it to like-for-like sales growth. I am confident he will play a pivotal role in getting Poundland back on track, given his previous success there.”
With rising costs and increased competition in the UK discount retail market, the future of Poundland now depends on whether Pepco finds a buyer or another strategic solution in the 2025 financial year.
