# Poundland up for sale as budget tax changes drive up costs

## Introduction

Owner Pepco Group considers ‘all strategic options’ amid ‘increasingly challenging UK retail landscape’

The Poland-based Pepco Group said it was considering “all strategic options” to spin out the struggling 825-store chain from the wider group, including a potential sale, as it focused on its more profitable Pepco brand.

The move comes as WH Smith is expected to whittle down bids for its high street chain from suitors including the restructuring specialists Hilco and Alteri as well as HMV’s owner, Doug Putman. Retailers have warned of  and slow sales growth, with UK households keeping a tight rein on spending amid rising costs of energy bills, groceries, rent and mortgages.

Budget chains such as Poundland are having a particularly tough time due to rising competition from supermarkets, including Tesco, Aldi, Lidl, as well as the expansion of groups such as Savers, The Range and Home Bargains. These retailers’ slim profit margins also give them little room to absorb additional costs, while low-wage shoppers now have little spare cash for non-essentials.

Last year, Poundland’s rival Poundstretcher was  in its latest rescue deal, while another rival, Poundworld, .

Russ Mould, the investment director at AJ Bell, said it was no surprise that Pepco had put its UK business up for sale: “Poundland was once the envy of retailers across the UK, attracting significant footfall and customers filling their baskets on every journey. Now, Poundland has come to symbolise the forgotten wasteland of UK high streets, full of copycat outlets and sandwiched between charity shops and vape stores.

“Finding a buyer won’t be an easy task and any deal will likely lead to store closures and job cuts. Poundland needs to be slimmed down and refocused so it has a chance of getting back on top.”

Pepco Group said Pepco made the “vast majority” of its earnings and the group wanted to “further build on that strong base ultimately as a single pan-European format”.

Pepco warned over annual earnings at Poundland amid “more difficult” trading conditions and as costs soared.

The company said underlying earnings would come in at between €50m and €70m (£41.9m and £58.6m) after sales remained in negative territory over January and February.

“Poundland is a strong brand that serves millions of customers every week and had around €2bn in annual turnover in financial year 2024, but it is also operating in an increasingly challenging UK retail landscape that is only intensifying,” it said.



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