Gordon Brothers, the Boston-based investment firm that rescued Poundland for £1 a year ago, is weighing a sale of the discount chain, according to reports.
The firm has held discussions with advisers about launching a potential auction for the retailer, which is currently undergoing a significant restructuring. No final decision has been made, but it is understood Gordon Brothers is likely to proceed with an auction, with advisers anticipated to be appointed within days.
Poundland has moved away from its iconic £1 price points and has "performed poorly" in a "difficult" retail landscape, according to court documents.
Financial struggles and restructuring
Poundland recorded a £79m pre-tax loss in the year to September 2024, while revenue fell by 2.5 per cent to £1.8bn. Directors attributed the loss to "significant changes" in its product range, aligned with Pepco Group's objective of maintaining one range across its group, which includes Irish discounter Dealz.
"This, coupled with the volatile economic and retail environments impacting the sector negatively impacted transactions and sales," Poundland's directors wrote in the company's accounts.
Last August, the High Court sanctioned an 11th-hour restructuring scheme that led to the closure of up to 200 branches. Poundland had previously confirmed it was shutting 68 locations and cautioned it was mere days from collapse ahead of its court hearing.
Recovery strategy and future outlook
Tom Smith KC, representing the chain in court, said its financial circumstances had "significantly deteriorated during the last two years" and that Poundland had "performed poorly in a difficult retail and economic environment."
The retailer has maintained that its recovery strategy is generating fresh impetus. In January, managing director Barry Williams said the chain has made "significant progress" but still has "much to do."
"Our focus on our costs has, without doubt, given us a platform for future growth, but no sustainable turnaround can be based on cost management alone," he said. "That's why our focus in 2026 will be on delivering the kind of ranges and price simplicity our customers want right across the store – in clothing, homewares as well as our core grocery aisles."
A spokesperson for Poundland said: "We've made very significant progress over the past year with a recovery plan that's created simpler, better value for customers centred around thousands of items back at our iconic £1 price point."
Poundland, headquartered in Walsall, West Midlands, was established in 1990 and runs approximately 600 stores across the UK.
