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Several potential buyers have reportedly tabled their offers to acquire Poundland, after the retailer has been hit by struggling sales and mounting losses in recent months.
According to Sky News, Hilco Capital and turnaround investor Endless both set forth their respective proposal offers on Friday (25 April) ahead of a deadline set by Pepco Group, the current owner of Poundland.
They reportedly join Alteri Investors, which owns Bensons for Beds, while Modella Capital is also said to be among the interested parties, following its recent acquisition of WH Smith’s high street arm for £76m.
Last month, Pepco announced it was “actively exploring” a potential sale of Poundland amid rising pressures on the business, instead planning to focus on the Pepco brand as a single future format.
It comes as Q2 sales at Poundland were hit by “continued challenges” as the group continued to experience a negative like-for-like sales performance, impacted by similar trends seen in the last financial year.
At its latest Capital Markets Day, Pepco said that over the last few years, it has attempted to integrate the Pepco, Poundland and Dealz operations into one brand with a simpler business model, expecting this would “bring both scale and efficiency benefits”.
However, it said it has “become clear” over the last 12 months that this integration has “not delivered for customers or shareholders”, leading to lower revenue growth and profitability as Poundland dragged its performance.
While Poundland reported a €2bn (£1.7bn) annual turnover in FY24, Pepco warned it is also operating in an “increasingly challenging UK retail landscape that is only intensifying”.
It added that additional tax changes announced in the budget will also add further pressure to Poundland’s cost base.
Hilco Capital and Endless have been contacted for comment.
