Poundland bought for £1 with stores set to near

Struggling finances chain Poundland has been bought for £1 and now faces a shake-up which might see as much as 100 retail outlets shut, the BBC understands.

Its proprietor Polish company Pepco showed it had bought the logo for a “nominal” sum to US funding company Gordon Brothers.

Poundland has 825 UK retail outlets and round 16,000 group of workers and was once suffering to compete with different bargain retail outlets, with gross sales down this January and February.

Following the sale a proposed restructure will likely be put to the High Court in England, Pepco mentioned.

It comes after Pepco warned that higher employer National Insurance contributions which kicked in in April would put added drive at the chain.

Pepco Group has owned Poundland since 2016, however the company needed to public sale the logo off after gross sales slumped over the last 12 months.

Gordon Brothers is a world funding company which previously owned model label Laura Ashley.

Pepco mentioned it was once successfully offloading an unprofitable a part of the trade and Poundland remained a well-loved logo with hundreds of thousands of shoppers once a year.

But retail analyst Sofie Willmott from GlobalData mentioned Poundland’s enchantment has been waning as UK shoppers sought higher high quality and worth for cash somewhere else.

“Those who favoured Poundland for low price groceries have been tempted away by the supermarkets who have been aggressively competing on price, and the failure of its clothing range has been a distraction for the retailer”, she mentioned.

Consumer knowledgeable Kate Hardcastle mentioned a sale for a nominal quantity “often signals a business model that has struggled to keep pace with market forces,

“In this example, it displays now not simply inside demanding situations however profound shifts in how shoppers now store,” she said.

Brands such as Temu and Shein have “essentially modified shopper expectancies round worth, velocity and comfort”, she added.

She mentioned this put “unrelenting drive” on the likes of Poundland.

“Against that backdrop, the once-simple promise of a ‘pound store’ now not carries the similar weight or differentiation”.

Following its sale the business will continue to be led by Barry Williams, currently managing director of Poundland, it said.

The business will continue to operate under the Poundland brand in the United Kingdom and under the Dealz brand in the Isle of Man and Republic of Ireland, it added.

“We need to sincerely thank the entire Poundland crew for his or her ongoing dedication and contribution to the gang and need Barry Williams and his crew the entire best possible for the longer term,” said Pepco chief executive Stephan Borchert.

In March, Pepco mentioned Poundland was once “running in an more and more difficult UK retail panorama this is simplest intensifying”.

“Pepco Group expects to acquire a minority funding passion in Poundland”, Pepco wrote in a unlock.

Gordon Brothers is investing a total of £80m in Poundland which includes an existing secured loan of £30m and a further £30m overdraft.

Mark Newton-Jones, head of Gordon Brothers’ Europe group said it was “thrilled” to provide financing for “the considerable turnaround of this iconic store”.

He added: “We consider Poundland is an very important store serving UK shoppers and performs a very powerful function at the High Street.”

He mentioned the gang would “be certain we proceed offering remarkable price to budget-conscious shoppers in the United Kingdom.”