Pepco to sell off Poundland business by September – for £1
Discount giant Pepco is set to sell its Poundland business by September as the brand struggles with high costs and low sales.
In an update to markets this morning, Pepco said Poundland continued to see “challenging trading conditions” with revenue down 6.5 per cent in the first half of the year.
The discount chain now expects to deliver underlying earnings before interest, tax, depreciation and amortization (EBITDA) of around €0m to €20m, compared to previous guidance of €50m to €70m.
Poundland sat in stark contrast to Pepco’s overall performance – revenue at the parent company rose 9.3 per cent to £2.17bn.
Pepco said downgrade relates to “highly challenging trading conditions”, which have been further impacted by clearance of old stock and product availability issues.
It added that a turnaround plan is underway “to rebuild core heritage category strengths”, while focusing on a simpler in-store offer and price points.
Barry Williams was reappointed as Poundland Managing Director in March 2025 to drive the turnaround.
New leadership needed to ‘revitalise’ Poundland
Pepco has said that the company is “actively exploring” a Poundland sales, and expects an exit for the business before the end of the 2025 financial year, which comes in September.
“With consumer demand for value rising, the business is well-positioned for recovery under revitalised leadership,” Pepco said.
A source close to the matter told The Times that the business would be sold for “effectively a pound” because of the costs associated with revitalising the business under new ownership.
While Poundland thrived during the financial crisis, it has faced increased competition from supermarkets and other discounters in the last few years.
A higher minimum wage and higher national insurance contributions (NICs) have both added to operating costs, too.
However, it has struggled more than fellow discounters – sales at Home Bargains jumped last year, and B&M expects only a small drop in earnings for 2025.
Poundland has particularly struggled with logistical challenges like the Red Sea shipping disruption, plus insufficient stock sizing and high debt.
The Times has reported that Gordon Brothers is in pole position to buy Poundland, although the sale would lead to significant store closures and around 200 job losses.
Other interested parties include Modella Capital – recent buyer of WHSmith’s high street arm – and Lakeland owner Hilco Capital.