The high street could be hit with another set of closures. (Image: GETTY)
High street favourite Poundland, with its extensive network of 825 stores, may be facing a shake-up as it prepares for a potential sale. Advisers from Teneo have been brought in to manage the sale proceedings amid speculation that some outlets might close if the chain changes hands.
This development follows an announcement by Pepco Group, the retail giant behind Poundland, confirming it was considering “all strategic options” for its subsidiary, highlighting a possible sell-off.
A spokesperson from Pepco informed The Telegraph, “As stated at our capital markets day on March 6, we are actively exploring separation options, including a potential sale, for the Poundland business. We have started to work with advisers to support us with this process.”
In addition, the group had previously enlisted Alix Partners early this year to perform a strategic evaluation of the Poundland brand.
Pepco has issued warnings about its financial outlook, predicting that underlying profits will fall to between €50 million and €70 million (£41.9 million and £58.6 million), a significant drop from the €153 million recorded for 2023/24. The company attributes this downturn to the difficulties faced in the UK retail market and recent fiscal policy decisions, including hikes in employers’ National Insurance contributions and an upward adjustment of the minimum wage, reports .
Poundland shoppers stand to make major savings. (Image: GETTY )
Currently, firms pay 13.8% towards National Insurance, which is set to increase to 15% come April 2025.
The threshold for employers to start paying National Insurance will decrease from £9,100 to £5,000 per annum. Concurrently, the minimum wage will see a 6.7% increase.
The minimum wage will rise from £11.44 to £12.21 per hour for individuals 21 and older. Those aged 18-20 will experience an increase from £8.60 to £10 per hour, while under-18s and apprentices will witness a jump from £6.40 to £7.55 per hour.
Meanwhile, in a statement issued last week regarding the exploration of a potential sale, Pepco emphasized: “Poundland is a strong brand that serves millions of customers every week and had around two billion euros (£1.67 billion) in annual turnover in financial year 2024, but it is also operating in an increasingly challenging UK retail landscape that is only intensifying.”
Pepco added: “From April 2025, the UK Government’s additional tax changes announced in the Budget will also add further pressure to Poundland’s cost base. Therefore the board is actively evaluating all strategic options to separate Poundland from group during financial year 2025, including a potential sale.”