Famous discount chain Poundland has been sold for the price of one of its own items, in a deal which sees Gordon Brothers acquire the brand for £1. The deal comes six months after former owner Pepco Group commissioned AlixPartners to explore the options available to the flagging chain.
Times of financial strain are said to be favourable to super-budget stores. Their discounted goods are capable of undercutting leading grocers, and win customers among a consumer base increasingly exposed to a cost-of-living crisis. But Poundland has struggled in recent years.
2016 saw the chain taken over by Polish-listed Pepco Group, which soon began to make changes. In 2017, the year following the UK’s vote to exit the EU, the brand dropped its pledge to price all of its products at just £1. In the years since, items in its 825 stores have been priced between 50p and £1.
And while demand for competitors like Home Bargains, B&M and Poundstretcher might have risen following the rampant inflation the UK has faced in recent years, that does not seem to have been the case for Poundland. In 2024, the discounter recorded roughly €2 billion of sales – which included a like-for-like sales slump of 7.3% during the Christmas trading period.
In its trading statement, Pepco said that Poundland had suffered “a more difficult sales environment and consumer backdrop in the UK, alongside margin pressure and an increasingly higher operating cost environment”. It added that it expected “the negative sales performance for Poundland to moderate as we move through the year” – but does not seem to have allowed much time for that to manifest.
Instead, at the start of 2025, this saw Pepco hit the panic button, tapping experts from AlixPartners (a company which has previously consulted for Pepco’s own parent group, Steinhof) to come up with a plan – “weeks after Stephan Borchert, the Pepco CEO, said he would consider “every strategic option” for reviving Poundland’s performance.
Pepco stated later in the year that it was considering a possible sale of the UK budget retailer after warning of “more difficult” trading conditions. Conditions cited included a rise in employer National Insurance Contributions (NICs) and the National Minimum Wage in April. And now, in June, the sale has transpired, characteristically for just £1.
The sale to Gordon Brothers comes as ominous news to Poundland’s 16,000 staff based across Britain. While Gordon Brothers – which previously owned Laura Ashley – said it would invest up to £80 million in Poundland to help turn the business around, part of its takeover deal reportedly includes a restructuring plan, putting thousands of jobs at risk.
The company is expected to seek around 100 store closures and a raft of rent reductions from landlords as part of the process. Poundland has told the British press that the details would be communicated “in due course”.