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BBC Business reporter Faarea Masud reports that the struggling budget chain Poundland has been acquired for £1, leading to potential closures of up to 100 stores. The brand was sold by its owner, Polish firm Pepco, to US investment firm Gordon Brothers for a nominal sum. With 825 UK stores and approximately 16,000 employees, Poundland has faced challenges in competing with other discount retailers, resulting in declining sales during January and February.
In response to the sale, a proposed restructure will be presented to the High Court in England, according to Pepco. The decision to sell Poundland was influenced by Pepco citing increased National Insurance contributions as an additional burden on the chain. Pepco Group had owned Poundland since 2016, but a decrease in sales prompted the auctioning off of the brand, leading to its acquisition by Gordon Brothers, a global investment firm previously associated with fashion label Laura Ashley.
Despite Poundland’s historical popularity as a budget shopping destination, consumer trends have shifted towards seeking better quality and value elsewhere. Retail analyst Sofie Willmott noted that the allure of Poundland has diminished, with consumers opting for alternative options offered by supermarkets and online retailers like Temu and Shein. Kate Hardcastle, a consumer expert, emphasized that evolving consumer preferences have placed significant pressure on traditional retailers like Poundland, impacting their ability to keep up with changing market dynamics.
Following the sale, Poundland will continue to operate under the leadership of Barry Williams, the current managing director of the brand. The business will retain its identity under the Poundland name in the UK and as Dealz in the Isle of Man and Republic of Ireland. Pepco’s CEO, Stephan Borchert, expressed gratitude to the Poundland team for their dedication and wished the management under Barry Williams success in the future. Gordon Brothers’ investment of £80m in Poundland, consisting of a secured loan and an overdraft, aims to support the revival of this iconic retailer and provide value to budget-conscious consumers in the UK
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