Pepco Group, the owner of Poundland, is contemplating a sale of the UK-based discount retail chain as it faces challenging trading conditions and anticipates rising wage costs following measures to be implemented in October’s budget. The Poland-based company stated that it is considering all strategic options, possibly separating Poundland from the wider group, in order to focus on their more lucrative Pepco brand.

Pepco has reported low annual earnings at Poundland due to the tough retail landscape in the UK, where sales have stayed negative throughout January and February. The company warned that the additional tax changes from April 2025, as announced in the budget, will further impact Poundland’s expenses. Thus, Pepco’s board is evaluating all strategic options to separate Poundland from the group during the 2025 financial year, including the possibility of a sale.

Pepco stated that Poundland is still a strong brand that serves millions of customers weekly and had around €2 billion in annual turnover in the financial year 2024. However, it is operating in an increasingly difficult UK retail environment. The group also plans to offload the Dealz business in Poland at a later date, although it will continue to manage the chain for now.

As part of its plans, Pepco announced that Barry Williams, the former managing director of Poundland who took over as the managing director of Pepco in September 2023, will return to his former role at Poundland ahead of a possible sale.

Stephan Borchert, the chief executive of Pepco Group, stated that the board and he are actively exploring separation options for Poundland, including a potential sale. They are also considering the separation of the well-performing Dealz Poland in the medium term. Borchert expressed confidence in Williams’ ability to steer Poundland back on track, highlighting his previous success in the role.

Source: https://www.theguardian.com/business/2025/mar/06/poundland-up-for-sale-as-budget-tax-changes-drive-up-costs