Struggling cut price chain bought for £1 | EUROtoday

Struggling finances chain Poundland has been bought for £1 and now faces a shake-up which may see some shops shut.

Its proprietor Polish agency Pepco confirmed it had bought the model for a “nominal” sum to US funding agency Gordon Brothers.

Poundland has 825 UK shops and round 16,000 workers and was struggling to compete with different low cost shops, with gross sales down this January and February.

Following the sale a proposed restructure might be put to the High Court in England, Pepco mentioned. The BBC understands this might contain a major variety of retailer closures.

It comes after Pepco warned that elevated employer National Insurance contributions which kicked in in April would put added stress on the chain.

Pepco Group has owned Poundland since 2016, however the agency needed to public sale the model off after gross sales slumped over the previous yr.

Gordon Brothers is a world funding agency which previously owned vogue label Laura Ashley.

Pepco mentioned it was successfully offloading an unprofitable a part of the enterprise.

It mentioned Poundland remained a well-loved model with hundreds of thousands of consumers yearly.

Following its sale the enterprise will proceed to be led by Barry Williams, at the moment managing director of Poundland, it mentioned.

The enterprise will proceed to function underneath the Poundland model within the United Kingdom and underneath the Dealz model within the Isle of Man and Republic of Ireland, it added.

“We want to sincerely thank all the Poundland team for their ongoing commitment and contribution to the group and wish Barry Williams and his team all the best for the future,” mentioned Pepco chief government Stephan Borchert.

In March, Pepco mentioned Poundland was “operating in an increasingly challenging UK retail landscape that is only intensifying”.

“Pepco Group expects to obtain a minority investment interest in Poundland”, Pepco wrote in a launch.

It mentioned Gordon Brothers would make investments a complete of £80m in Poundland which included an current secured mortgage of £30m and an extra £30m overdraft.

Mark Newton-Jones, head of Gordon Brothers’ Europe group mentioned it was “delighted” to offer financing for “the substantial turnaround of this iconic retailer”.

He added: “We believe Poundland is an essential retailer serving UK consumers and plays an important role on the High Street.”

He mentioned the group would “ensure we continue providing exceptional value to budget-conscious consumers in the UK.”