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Pepco Group Explores Sale of Poundland as UK Retail Challenges Mount

The discount chain faces rising costs from government tax changes and declining sales, prompting its owner to evaluate strategic options.

A man walks past a Poundland store in London, Britain, April 16 2023. REUTERS/Peter Nicholls/File Photo
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Overview

  • Pepco Group, the Poland-based owner of Poundland, is considering selling the 825-store UK discount chain to focus on its more profitable Pepco brand.
  • Upcoming UK government tax changes, including higher national insurance contributions and a minimum wage increase, are expected to significantly raise operating costs for retailers like Poundland starting in April 2025.
  • Poundland reported declining sales in early 2025 and forecasts annual earnings of €50-70 million (£41.9-58.6 million), reflecting challenging trading conditions in the UK retail market.
  • The company plans to reinstate former Poundland managing director Barry Williams to lead the chain, aiming to stabilize operations before a potential sale.
  • Pepco is also considering the future of its Dealz chain in Poland and its Pepco stores in Germany as part of broader strategic evaluations.