Poundland’s owner has reportedly appointed City advisers to explore options for arresting an ongoing sales slump at the discount chain.
Warsaw-listed Pepco Group could explore options including a formal restructuring process that could lead to significant store closures or even a sale of the business, it has been claimed.
The group is said to have formally engaged AlixPartners last week, with options including a company voluntary arrangement or restructuring plan floated by a range of advisers on a “highly preliminary basis”, Sky News has reported.
Sources have said no decisions have been taken and the immediate focus remains on improving Poundland’s trading performance.
Pepco Group did not comment directly on the claims.
“As we stated in our quarter one results on 16 January, getting Poundland back on track is a key priority – and we are undertaking a comprehensive assessment of the business and taking immediate measures on improving Poundland’s cash performance and strengthening the customer proposition,” said a Pepco Group spokesperson.
Poundland’s same-store like-for-like sales fell 7.3% in its first quarter to 31 December, with the chain’s total revenues down 9.3% to €563m.
The decline was “largely driven by continued weak clothing and general merchandise performance, alongside previously flagged challenging market conditions”, the trading update said.
Weak trading in clothing and GM also dragged on Poundland’s performance last year, after a switch to sourcing at group level left gaps in the ranges.
However, the latest trading statement said the downturn had extended to fmcg, which accounts for nearly 70% of Poundland’s revenue.
“Poundland’s core fmcg category was also negative, albeit against a highly competitive environment in the UK,” the update said.
It added: “We expect that the toughest comparative quarter for Poundland is now behind us – the same quarter last year represented a period prior to the changes made within our clothing and GM ranges – and therefore, we expect the negative sales performance for Poundland to moderate as we move through the year. Poundland will also not open any net new stores during the year.”
It said Poundland, which has 825 stores, would not open any new shops this year.
Poundland started 2025 by increasing the number of products priced at £1 or less from about 1,500 to almost 2,400, nearly half its core range. The retailer had already increased the number priced at £1 or less in December, including everyday essentials such as bread and milk.
Last week also saw Poundland make what it called its “biggest ever investment” in tackling retail crime, after results revealed the annual cost of stock shrinkage for the chain had risen 30% in two years to over £40m.
Commenting as the quarter one trading statement was issue last week, Pepco Group CEO Stephan Borchert said: “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.”
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