Poundland’s proprietor has mentioned it’s contemplating placing the chain up on the market after warning tax modifications coming in April will put extra strain on the enterprise.
The low cost chain has 825 UK shops however gross sales have been down this January and February, its Polish proprietor Pepco Group mentioned.
An increase in employer Nationwide Insurance coverage (NI) contributions introduced within the Funds begin in April and Pepco says these will “add additional strain” to Poundland’s prices.
A number of Excessive Road manufacturers have warned of store closures, job losses and worth rises because of rising prices, however Chancellor Rachel Reeves has defended the NI improve as “the correct choices within the nationwide curiosity”.
Pepco Group mentioned Poundland was “working in an more and more difficult UK retail panorama that’s solely intensifying”.
“From April 2025, the UK authorities’s extra tax modifications introduced within the Funds may also add additional strain to Poundland’s price base,” it added.
Retailers have been among the many most vocal of companies criticising the NI improve and the rise within the minimal wage, which is able to each occur in April.
Tesco, Amazon, Greggs, Subsequent and dozens of different chains final yr wrote to the Treasury urging it rethink a number of the Funds measures.
The federal government has defended the tax rise as essential to keep away from cuts to public companies.
The Pepco Group, which owns Pepco and Dealz shops in Europe, is making a revenue so is taking a look at methods to separate itself from Poundland “together with a possible sale,” it mentioned.
As a part of the plans, former Poundland managing director Barry Williams, who took over as managing director of Pepco in September 2023, will return to his Poundland position.
Stephan Borchert, chief govt of Pepco Group, informed Reuters there are “positively events for this enterprise” and mentioned he was assured Poundland’s future would be determined by September this yr.
“Undoubtedly we’re taking a look at all choices however a sale is presumably an excellent possibility since we imagine that the enterprise will do higher with a brand new proprietor,” he mentioned.
Pepco Group mentioned its “final ambition” is to function below the one Pepco model, specializing in its extra worthwhile greater clothes and normal merchandise ranges. It’s also contemplating separating out the well-performing Dealz Poland.
